What is a Lok Adalat?

Lok Adalat is a forum where the disputes/cases pending in the court of law or at pre-litigation stage are settled/ compromised amicably. The Lok Adalat has been given statutory status5 under the Legal Services Authorities Act, 1987. Under the said Act, the award made by the Lok Adalat is deemed to be the decree of a civil court and is final and binding on all parties and no appeal lies before any court against its award.

The problem of unmanaged backlog of cases, mounting arrears and inordinate delay in disposal of cases in Courts at all levels lowest to the highest coupled with exorbitant expenses have undoubtedly attracted the attention of not only the lawyers, litigants, social activists, legal academics, legislature, judiciary but also everyone concerned with judicial reforms. The sole governing consideration, therefore, how to reduce the delay in disposal of cases, make the system resilient by removing its stratification, making the system less formal and truly inexpensive so as to bring justice within the reach of the poor.

Nature of cases to be referred to Lok Adalat

1. Any case pending before any court

2. Any dispute which has not been brought before any court and is likely to be filed before the court

Provided that any matter relating to an offence not compoundable under the law shall not be settled in Lok Adalat.

How to get the case referred to the Lok Adalat for settlement?

A) Case pending before the court:

1. If the parties agree to settle the dispute in Lok Adalat or

2. One of the parties makes an application to the court or

3. The court is satisfied that that the matter is an appropriate one for settlement in Lok Adalat

B) Any dispute at pre-litigative stage

The State Legal Services Authority or District Legal Services Authority as the case may be on receipt of an application from any one of the parties to any pre-litigation stage matter refer such matter to the Lok Adalat for amicable settlement.

Why should you opt for Lok Adalat?

1. There is no court fee and if the court fee is already paid at the time of institution of the case such amount will be refunded to the concerned party if the dispute is resolved by the Lok Adalat. The dispute are settled without bearing any expenses by the parties.

2. Lok Adalats are empowered to settles the both kind of matters which are already pending before courts and which are at pre-litigation stage. The parties have an opportunity to bring the dispute before this institution at any time irrespective of whether the case is instituted in the court of law or not.

3. The procedure followed by Lok Adalat is simple, flexible, non-technical and informal. There is no strict application of procedural laws like Civil Procedure Code and Evidence Act while determining the claims of the parties by Lok Adalat.

4. The lawyers are not essential to be appeared during the conciliation process of Lok Adalat. However, they can assist the Lok Adalat in its proceeding by helping the parties to understand contentious issues and available alternatives and can persuade them to arrive at a settlement of the dispute.

5. It dispenses justice to the disputants through collaborative and participatory efforts of lawyers, law teachers, judges, administrative authorities and social workers who actively participate in the resolution of the dispute by discussion, counselling, persuasion, conciliation and humane approach.

6. Lok Adalat provides justice speedily to the parties, generally, when it resolve the cases in a single day. In this sense it helps to reduce the huge arrears in courts of law.

7. The award of Lok Adalat is final and binding. There are no further appeals, revisions or review applications. Therefore, the dispute ordinarily comes to an end.

8. The Lok Adalat system helps to create awareness among the people about their rights and duties mentioned in numerous social and welfare legislations. Lok Adalats are organized at various places such as villages, slum areas, industrial areas, labour colonies, towns and in jails, etc. In this way, it takes justice at the door-steps of the people.

9. The Lok Adalat settle the dispute on the basis of compromise and in the spirit of 'give and take'. Thus, there is neither a victor nor a vanquished and both the contestants are gainers and winners. They leave the premises smiling with no rancor or ill feeling for the other which ultimately leads to happiness and well-being of the society. So, the drive behind the Lok Adalat is the roused consciousness of the community to prevent disruption of local unity and to secure substantial equity and social justice, in a mood of human solidarity.

Permanent Lok Adalat

Permanent Lok Adalat has to be established by the National legal Services Authority or the State Legal Services Authorities. It shall have three members; the Chairman, who is or has been a District Judge or an Additional District Judge or has held a judicial office higher in rank than that of a District Judge and two other members having adequate experience in public utility service. Such persons shall be appointed by the State or the Central Authority, as the case may be, upon nomination by the respective Governments. But at the same time, such nomination shall be on the recommendation of the Central or the State authority. Section 22-C (3) provides that when an application is filed written statements with appropriate proof, including documents and other evidence. Copies of documents produced and statements made by the parties shall be given to each other. Therefore, PLA shall conduct conciliation proceedings between the parties to bring about an amicable settlement to the dispute. It is the primary duty of PLA as per Section 22-C (4). While conducting such conciliation proceedings, it is incumbent on the members of PLA to assist the parties to reach an amicable settlement.

We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service requirements.

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Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.

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THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016

The Real Estate (Regulation and Development) Act, 2016 which seeks to protect home-buyers as well as help boost investments in the real estate industry.

Coverage of this act:-

Ø The Real Estate Act makes it mandatory for all commercial and residential real estate projects where the land is over 500 square meters, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) for launching a project, in order to provide greater transparency in project-marketing and execution

Ø For on-going projects which have not received completion certificate on the date of commencement of the Act, will have to seek registration within 3 months. Application for registration must be either approved or rejected within a period of 30 days from the date of application by the RERA. On successful registration, the promoter of the project will be provided with a registration number, a login id and password for the applicants to fill up essential details on the website of the RERA. For failure to register, a penalty of up to 10 percent of the project cost or three years' imprisonment may be imposed.

PROTECTION OF BUYERS

Ø The Act prohibits unaccounted money from being pumped into the sector and as of now 70 per cent of the money has to be deposited in bank accounts through cheques.

Real Estate Regulatory Authority and Appellate Tribunal

It will help to establish state-level Real Estate Regulatory Authorities (RERAs) to regulate transactions related to both residential and commercial projects and ensure their timely completion and handover. Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities to dispose of complaints in 60 days while no time frame was indicated in earlier Bill.

Certain areas to be exempted from the RERA

Ø The Real Estate Act makes it mandatory for all commercial and residential real estate projects where the land is over 500 square meters, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) for launching a project, in order to provide greater transparency in project-marketing and execution. Where the area of land does not exceed to 500 square meters or the no. of apartments does exceed to be developed.

Ø Provided that: If the appropriate government considers it necessary, it may, reduce the threshold below five hundred square meters or eight apartments, as the case may be.

Ø Promoter has received the completion certificate for real estate project prior to commencement act.

REAL ESTATE REGULATORY AUTHORITY

Ø  Authority is established and incorporated under section 20. According to section u/s 35 Authority has power to take sue motto complaints and inquire against information and conduct the enquiry or invest on that matter. Authority can take cognizance on the sue motto if they necessary to so.

Ø According to section 36 interim order cabs are passed by the authority. 

Ø  Authority can be issue direction u/s 37.

Ø Authority has power u/s 38 to impose the penalty or interest.

Ø Authority has power to rectify its order any time within a period of 2years from the date of order made u/s 39.

If somebody does not agree to the direction or order of Authority then that person can file an appeal under REAL ESTATE APPELATE TRIBUNAL.

REAL ESTATE APPELATE TRIBUNAL

Ø REAL ESTATE APPELATE TRIBUNAL is established under section 43. As per s.43 (5) appeal of promoter would be entertained only on depositing at least 30% of the penalty on higher percentage determined by the appellate tribunal.

Ø As per section 44(5) appellate authority should be endeavor to dispose off the appeal within a period of 60days from the date of receipt.

Ø As per section 58 appeals can be filled against Appellate Tribunal within 60 days of communication of the order of the Appellate tribunal. In case of delay adequate reasoning is required.

OFFENSES AND PENALITIES

Ø As per section 59(1) punishment for non registeration u/s 3 for promoter would be penalty which may extend up to 10% of the estimated cost of the Real Estate Project as determined by the Authority.

Ø As per s.59(2) if the order passed u/s 59(1) is not complicated then promoter shall be punishable with imprisonment for a term which may extended up to 3yrs or with fine which extend to further 10% of the estimated cost of the project.

Ø As per s.60 the penalty for contravention of s4. of promoter would be penalty which may extend up to 5% the estimated cost of the Real Estate Project as determined by the Authority.

Ø As per the s.61 penalty for the contravention of provision of this act and rules other than s.3 and s.4 for the promoter shall be a penalty which may extend to 5% of the estimated cost of the real estate project as determined by the authority

Ø As per s.62 non registration and contravention u/s 9 and 10 done by Real estate agent, in such case he shall be liable to a penalty of rs10000 for everyday during such default continues, which may cumulatively extend up to 5%of the cost of the plot, apppartment or building, as the case may be, of the Real estate project, for which the sale or purchase has been facilitated as determined by the authority.

Ø As per s.63 penalty for failure to comply with the order of Authority would be penalty for everyday during which such default continues, which may cumulatively extend up to 5% of the real estate project as determined by the authority

Ø As per s.64 punishment for contravention of order of Appellate Tribunal by promoter shall be imprisonment for term which may extend up to 3yrs or fine for everyday during which such default continues, which may cumulatively extend up to 10% of the estimated cost of the real estate project or with both.

Ø As per s.65 penalty for failure to comply with order of the Authority by the real estate agent shall be a penalty for everyday during which default continues, which may cumulatively extend up to 5% of the estimated cost of plot, apartment or building or the case may be.

Ø As per s.68 punishment for the failure to comply with order of Authority by allottee shall be imprisonment for a term which may extend up to one year or with fine for everyday during which default continues, which may cumulatively extend up to 10% of the plot or with both

Ø As per the compounding of offences can be done either before or after institution of prosecution before court and any payments of sum shall not in any case, exceeded the maximum amount of the fine which may be imposed for the offense so compounded.

Ø As per section s.80 cognizance of offence can be taken by court on a complaint in writing made by the authority or by any officer of the authority duly authorized by it for this purpose.

We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service Mentality.

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Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.

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CORPORATE SOCIAL RESPONSIBILITY

Business is a part of larger external environment. It is a sub-system of the society. The modern corporation exerts considerable influence on the civil society, polity and the economy of the nation. It has to justify its role in the society as society gives business the license to operate. Simply giving economic benefits to the shareholders is not sufficient as societal expectations are continuously increasing. These expectations are the main reason behind the evolution of corporate social responsibility. And these expectations are the result of rapidly growing size of the business.

With the passes of time business has become more powerful and now it has far reaching impact on every aspect of the society. These impacts make it a moral duty of the business to be accountable and responsible for the same market. Contrary to them many companies are showing their deep passion to bring development in the society through CSR initiatives.

London Group Benchmarking Model (LGB) illustrates the impact of different corporate activities (with corporate community involvement) on society.

The LGB model has laid down methodology to measure and report on inputs and outputs of corporate community involvement. The relative sizes of the components are meant to reflect the company’s impact on society. The philanthropic component is typically what companies do for the society without any expectations, like donation of money. Social investment component includes limited range of social issues chosen by the company to protect long term corporate interest and to enhance its reputation. In commercial initiatives, the company is focusing more on the commercial benefits of the social involvement while addressing social issues. Cause related marketing or event sponsorship are typical examples of this type of engagement.

The business basics part of the model relate to how the company does its business and whether it is sensitive about the impact of its business on society. As per this model, a company’s business basics activities are expected to impact society more than its Philanthropic activities.

CSR in India has traditionally been seen as a philanthropic activity. And in keeping with the Indian tradition, it was an activity that was performed but not deliberated. As a result, there is limited documentation on specific activities related to this concept.

However, what was clearly evident that much of this had a national character encapsulated within it, whether it was endowing institutions to actively participating in India’s freedom movement, and embedded in the idea of trusteeship.

Behavioral Dimensions of CSR by management philosophers

HUMAN DIGNITY

Survival of any enterprise is outcome of the harmony between the company’s objectives, objectives of the state system and the people. Any conflict between the objectives of these three interactive players would stuck the business firm in the middle of the road ,corporations  are  responsible  for  worker’s human  dignity  and  status,  and  worker’s training and development as Corporation’s resource and not cost.

SOCIAL VALUES

Businesses are obliged to make and pursue those policies decisions which are desirable to social values of the community.

SOCIAL NEEDS

Execution of the businesses policies shall not be restricted to the firm's Financial gain, corporate interests only rather it should also cater for the sociologic aspects as well.

ETHICAL CONCEPT

The  social  responsibility  has  become  an ethical concept CSR  is  a  very  important  dimension  of corporate strategy and not a precondition for business success. The businesses must find a viable Course of action between what is socially and ethically rights and what is economically profitable. CSR is a voluntary initiative and should be proactive. Business encompasses the economic, legal, ethical and discretionary expectations that society has of business.

MORAL DUTY       

CSR is business response to the growing public concerns which revolves around its Socio-moral responsibility towards the well beings of society. CSR is behavior of business over and above what is ordinarily required by regulatory bodies and legal requirements.     

We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service Mentality.

Our team members deliver excellent performance in providing these services and our clients can avail the services at affordable prices.

Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.

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SHOULD INDIAN LAWYERS BE ALLOWED TO WORK ON CONTINGENCY

The Bar Council of India prohibits advocates from charging fees to their clients contingent on the results of litigation or pay a percentage or share of the claims awarded by the Court. Bar Council of India Rules: Part VI, Chapter II, Section II, Rule 20 which reads as under:

“20. An advocate shall not stipulate for a fee contingent on the results of litigation or agree to share the proceeds thereof.”

Many have the misconception that the reason why lawyers do not work on a contingency basis is that such an agreement between the lawyer and client would be a wagering one, and therefore are void. Apart from the Bar Council Rules which have expressly prohibited it, in the landmark case of Ganga Ram v. Devi Das, 61 P.R. (1907), such an agreement was held to be void for being against public policy and also against professional ethics. 

 However, although prohibited, in several cases, especially those before the lower Courts, clients are charged on the percentage of claim amount that the lawyer is able to recover. However, the practice though prevalent, has hardly led to disputes and is can seldom be proved. Reason being that the contingency agreement is always oral and highly informal. It must be remembered that such an agreement is not only void but also would lead to the lawyer facing disciplinary action by the Bar Council and a chance of losing one’s license to practice at the Bar.

Contingency fees exist in the civil realm because the attorney "attaches" their fee to the resulting award; if there is no award, there is no fee. Many states also bar attorneys from taking divorce cases on contingency for similar reasons -- there's not an "award" but rather a separation of property. Further, it's an ethical issue that could result in the attorney preferring a plea bargain over going to trial, in order to further their interest in securing payment from the client, rather than taking the client's best interest. This isn't as much of a concern in the civil realm, because someone's not going to prison; they're just settling a dispute between private parties.

The main reason for the express prohibition in the Bar Council of India Rules is probably because lawyers must not be allowed to have ulterior interests in the outcome of the case. They are considered to be of a ‘noble profession’, and are officers of the Court. Their main objective must be Justice and not financial gain.

 If they were interested in the matter, they might adopt unfair means or allow their emotions to get the best of them. Sometimes, the Court may grant an alternate remedy then the one paid for, which the contingency agreement does not cover. In such case it is difficult to determine the lawyer’s fee. This may lead to unimaginable amount of disputes between lawyer and client.

Although theoretically this may seem like a very good reasoning, but in practice the Contingency Fee system is a boon to poor clients. There must be several people in India, who even though they have been wronged, do not take legal action because of the legal expenses and the fear that even after somehow being able to meet those expenses, still losing the suit. If the abovementioned rule is removed from the Bar Council of India Rules, then this transaction can be developed. Written and formal documents can come into existence with clear cut clauses for every possible outcome, as well as whether out-of-pocket expenses are also to be paid are also contingent

K.L. GAUBA VS UNKNOWN

This is an application under our disciplinary jurisdiction against Mr. K. L. Gauba. It came to the notice of this Court that Mr. Gauba, who is an advocate of this Court, had entered into an agreement with his client, one Amarnath Bhardwaj, which appeared to be champertous and this Court took the view that the circumstances under which the said agreement had been entered into and the terms of the agreement itself called for an investigation under the disciplinary jurisdiction, and so it was decided to refer this case to the Bar Council.

Accordingly, on May 1, 1953, the learned Chief justice appointed three members of the Bar Council to constitute a Tribunal under Section 11 of the Bar Councils Act for inquiring into this case. Notice of the intended inquiry was served on Mr. Gauba in due course. He appeared before the Bar Council Tribunal, gave his explanation on July 10 and filed an additional statement on August 6, 1953. The matter was then heard by the Members of the Tribunal and they made the report on December 16, 1953. The Tribunal has held that the respondent had entered into an agreement with the client that he should be given half of the profits of the litigation in case of success and this in the opinion of the Tribunal amounted to professional misconduct. After this report was received, notice of the hearing of the present application was served on Mr. Gauba and the matter has thus come before us for final disposal.

It would thus seem that the American decisions are based upon the statutory law upon the subject as obtaining in America. In India, however, we have got the provisions ofSection 23 of the Indian Contract Act according to which the agreements like the agreement in this case being against public policy must be deprecated. I, therefore, agree with my learned brother that Mr. Gauba's conduct in this case was grossly unprofessional and most objectionable

Law Commission fails    

The Law Commission of India has failed to address the issue of excessive litigation cost in the country which is predominantly the result of unfair levy of fees by lawyers. In its 240th report (May 2012), the commission examined several state rules on fees and strangely, pleaded for enhancement of fees! According to the report, fee prescribed in the rules is ‘so meager’.  

Rules do not cover all types of cases or courts and, therefore, the major varieties of fee are outside their ambit. Levying of fee by lawyers in India is not by and large governed by any rules at all, and even in areas covered by the rules, as in civil litigation, they are honored only in their breach.  

Ø The public view of eminence in advocacy also needs to be changed.

The artificial and luxurious misconceptions about professional greatness need to be exposed and fairness in fixation of remuneration recaptured. While recognising the labour behind research, travel and homework, the litigant also should be guaranteed fairness in dealings. We are yet to realise the significance of proper guidance and genuine legal consultation. It is reasonable to charge for a fair advice after due consultation than charging exorbitantly for a fruitless litigation based on an erroneous or casual advice.

The country should change its litigation habits. More egalitarian and sophisticated methods of dispute resolution like arbitration and conciliation are to be encouraged in areas ranging from business to matrimonial disputes. The iron wall between legal profession and society is only to be smashed and the profession demystified. There is a real need to evolve a national movement for fair advocacy which should take in lawmen as well as laymen from all the states. 

Types of Legal Fees:-

The type of fee arrangement that you make with your lawyer will have a significant impact on how much you will pay for the services. Legal fees depend on several factors, including the amount of time spent on your problem; the lawyer's ability, experience, and reputation; the novelty and difficulty of the case; the results obtained; and costs involved. There will be other factors such as the lawyer's overhead expenses (rent, utilities, office equipment, computers, etc.) that may affect the fee charged.

There are several common types of fee arrangements used by lawyers:

• Consultation Fee: The lawyer may charge a fixed or hourly fee for your first meeting where you both determine whether the lawyer can assist you. Be sure to check whether you will be charged for this initial meeting.
• Contingency Fees: The lawyer's fee is based on a percentage of the amount awarded in the case. If you lose the case, the lawyer does not get a fee, but you will still have to pay expenses. Contingency fee percentages vary. A one-third fee is common. Some lawyers offer a sliding scale based on how far along the case has progressed before it is settled. Courts may set a limit on the amount of a contingency fee a lawyer can receive. This type of fee arrangement may be charged in personal injury cases, property damage cases, or other cases where a large amount of money is involved. Lawyers may also be prohibited from making contingency fee arrangements in certain kinds of cases such as criminal and child custody matters. Contingency fee arrangements are typically not available for divorce matters, if you are being sued, or if you are seeking general legal advice such as the purchase or sale of a business.
• Flat Fees: A lawyer charges a specific, total fee. A flat fee is usually offered only if your case is relatively simple or routine such as a will or an uncontested divorce.
• Hourly Rate: The lawyer will charge you for each hour (or portion of an hour) that the lawyer works on your case. Thus, for example, if the lawyer's fee is $100 per hour and the lawyer works 5 hours, the fee will be $500. This is the most typical fee arrangement. Some lawyers charge different fees for different types of work (legal research versus a court appearance). In addition, lawyers working in large firms typically have different fee scales with more senior members charging higher fees than young associates or paralegals.
• Referral Fee: A lawyer who refers you to another lawyer may ask for a portion of the total fee you pay for the case. Referral fees may be prohibited under applicable state codes of professional responsibility unless certain criteria are met. Just like other fees, the total fee must be reasonable and you must agree to the arrangement. Your state or local bar association may have additional information about the appropriateness of a referral fee.
• Retainer Fees: The lawyer is paid a set fee, perhaps based on the lawyer's hourly rate. You can think of a retainer as a "down payment" against which future costs are billed. The retainer is usually placed in a special account and the cost of services is deducted from that account as they accrue. Many retainer fees are non-refundable unless the fee is deemed unreasonable by a court. A retainer fee can also mean that the lawyer is "on call" to handle your legal problems over a period of time. Since this type of fee arrangement can mean several different things, be sure to have the lawyer explain the retainer fee arrangement in detail.
• Statutory Fee: The fees in some cases may be set by statute or a court may set and approve a fee that you pay. These types of fees may appear in probate, bankruptcy, or other proceedings.

With all types of fee arrangements you should ask what costs and other expenses are covered in the fee. Does the fee include the lawyer's overhead and costs or are those charged separately? How will the costs for staff, such as secretaries, messengers, or paralegals be charged. In contingency fee arrangements, make sure to find out whether the lawyer calculates the fee before or after expenses.

We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service Mentality.

We have a team of highly qualified professionals and time to time training is provided by us as per the requirements. Our team members deliver excellent performance in providing these services and our clients can avail the services at affordable prices.

Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.

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Composition Scheme Rules under GST

Composition Scheme Rules under GST provide for all the procedural compliance w.r.t. intimation for Composition Scheme, effective date for levy, conditions and restrictions on levy, validity of levy and rate of tax.

The current state indirect tax regime has provided a simpler compliance for small dealers known as the Composition Scheme. Under this scheme you,

• Pay taxes only at a certain percentage of turnover
• File periodic returns only (usually on a quarterly basis)
• Have an option of not having to maintain detailed records or follow tax invoicing rules
• Are not allowed to take Input Tax Credit (ITC)
• Are not allowed to collect tax on sales

A. Intimation and Effective date for Composition Levy

1.   For persons already registered under pre-GST regime

Any person being granted registration on a provisional basis (registered under VAT Act, Service Tax, Central Excise laws etc) and who opts for Composition Levy shall file an intimation in FORM GST CMP-01, duly signed, before or within 30 days of appointed date. If intimation is filed after the appointed day, the registered person:

a) Will not collect taxes

b) Issue bill of supply for supplies

FORM GST CMP- 03 must also be filed within 60 days of exercise of option:

a) Details of stock

b) Inward supply of goods received from unregistered persons held by him on the date preceding the day of exercise of option.

2. For persons who applied for fresh register under GST to opt scheme

For fresh registration under the scheme, intimation in FORM GST REG- 01 must be filed.

3. Registered under GST and person switches to Composition Scheme

Every registered person under GST and opts to pay taxes under Composition Scheme, must follow the following:

a) Intimation in FORM GST CMP- 02 for exercise option

b) Statement in FORM GST ITC- 3 for details of ITC relating to inputs lying in stock, inputs contained in semi-finished or finished goods within 60 days of commencement of the relevant financial year

b. Conditions for a Composite Tax Payer

Apart from the threshold limit, the following conditions are applicable for a composite tax payer:

• Cannot be engaged in supply of services, other than supply of food or drinks for human consumption
• Cannot be engaged in manufacture of specific notified goods
• Cannot supply goods not taxable under GST
• Cannot supply goods through an e-commerce operator
• No Interstate outward supplies – A composite tax payer should not engage in interstate outward supply of goods and / or services .
• Payment of composition tax – If the composite tax payer is in the trade of supplying goods and services, then composition levy will be applicable for both supply of goods and supply of services.
• Does not have to collect tax – The composite tax payer does not have to collect tax on all his outward supply of goods and / or services.
• Applicable for all business verticals under the same PAN – Composition levy will be applicable for all business verticals operating within state or interstate under the same pan.
• What does this mean?
• An individual with different business verticals, like:
• Mobiles & Accessories
• Stationery
• Franchisee

In the above scenario, the composition scheme will be applicable for all three business verticals. The dealer cannot opt for any one business vertical to fall under the composition scheme. For example, if the business vertical’s place of business is in Karnataka & Kerala for a single PAN, each of the business vertical in that particular state should have only ‘Intra-State(within state)’ supplies.

• Cannot claim Input Tax Credit – The composite tax payer is not eligible to claim input tax credit on all his inward supply of goods and / or services.
• What does this mean?
• If a dealer chooses to be a composite tax payer, he cannot claim input tax credit even if he makes taxable purchases from a regular taxable dealer. Ideally, the taxable amount would be added to the composite tax payer’s cost.
• Conclusion

Any person who opts for the scheme will be deemed to have been opted for all the places of business having the same registered PAN. Hence, you may not choose any one of all the place of business to be registered under scheme.

Composition Scheme Rules under GST have been targeted to be strict and crisp for the persons availing the Composition Scheme.

We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service Mentality.

We have a team of highly qualified professionals and time to time training is provided by us as per the requirements. Our team members deliver excellent performance in providing these services and our clients can avail the services at affordable prices.

Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.

Contact at parascs@gmail.com or refer website www.pnjlegal.com