(1)

Notwithstanding anything to the contrary contained in this Act but subject to the provisions of sub-sections (3) and (4) of section 9, a registered person, whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees may opt to pay, [in lieu of the tax payable by him under sub-section (1) of section 9, an amount of tax calculated at such rate] [Substituted 'in lieu of the tax payable by him, an amount calculated at such rate' by Punjab Act No. 1 of 2019, dated 8.1.2019.] as may be prescribed, but not exceeding, -

(a) one per cent. of the turnover in State in case of a manufacturer,

(b) two and a half per cent. of the turnover in State in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II, and

(c) half per cent. of the turnover in State in case of other suppliers, subject to such conditions and restrictions as may be prescribed:

(2)

The registered person shall be eligible to opt under sub-section (1), if -

(a) [ save as provided in sub-section (1), he is not engaged in the supply of services;] [Substituted by Punjab Act No. 1 of 2019, dated 8.1.2019.]

(b) he is not engaged in making any supply of goods which are not leviable to tax under this Act;

(c) he is not engaged in making any inter-State outward supplies of goods;

(d) he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52; [***] [Omitted 'and' by Punjab Act No. 3 of 2020, dated 20.2.2020.]

(e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the [Council; and] [Substituted 'Council:' by Punjab Act No. 3 of 2020, dated 20.2.2020.]

(f) [ he is neither a casual taxable person nor a non-resident taxable person:] [Inserted by Punjab Act No. 3 of 2020, dated 20.2.2020.];

(2A)

[ Notwithstanding anything to the contrary contained in this Act, but subject to the provisions of sub-sections (3) and (4) of section 9, a registered person, not eligible to opt to pay tax under sub-section (1) and sub-section (2), whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in lieu of the tax payable by him under sub-section (1) of section 9, an amount of tax calculated at such rate as may be prescribed, but not exceeding three per cent of the turnover in the State, if he is not,-

(a) engaged in making any supply of goods or services which are not leviable to tax under this Act;

(b) engaged in making any inter-State outward supplies of goods or services;

(c) engaged in making any supply of goods or services through an electronic commerce operator who is required to collect tax at source under section 52;

(d) a manufacturer of such goods or supplier of such services as may be notified by the Government on the recommendations of the Council; and

(e) a casual taxable person or a non-resident taxable person:

(3)

The option availed of by a registered person under sub-section (1) [or sub-section (2A), as the case may be,] [Inserted by Punjab Act No. 3 of 2020, dated 20.2.2020.] shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds the limit specified under sub-section (1) [or sub-section (2A), as the case may be,] [Inserted by Punjab Act No. 3 of 2020, dated 20.2.2020.].

(4)

A taxable person to whom the provisions of sub-section (1) [or, as the case may be, sub-section (2A)] [Inserted by Punjab Act No. 3 of 2020, dated 20.2.2020.] apply shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax.

(5)

If the proper officer has reasons to believe that a taxable person has paid tax under sub-section (1) [or, as the case may be, sub-section (2A)] [Inserted by Punjab Act No. 3 of 2020, dated 20.2.2020.] despite not being eligible, such person shall, in addition to any tax that may be payable by him under any other provisions of this Act, be liable to a penalty and the provisions of section 73 or section 74 shall, mutatis mutandis, apply for determination of tax and penalty.

[Explanation 1. - For the purposes of computing aggregate turnover of a person for determining his eligibility to pay tax under this section, the expression "aggregate turnover " shall include the value of supplies made by such person from the 1st day of April of a financial year up to the date when he becomes liable for registration under this Act, but shall not include the value of exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.

Explanation 2. - For the purposes of determining the tax payable by a person under this section, the expression "turnover in State " shall not include the value of following supplies, namely: -

(i) supplies from the first day of April of a financial year up to the date when such person becomes liable for registration under this Act; and

(ii) exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.]