In exercise of the powers conferred by Section 56 of the Jammu and Kashmir Value Added Tax Act, 2005, the Government hereby direct that there shall be Composition of Tax (CoT) in lieu of tax payable under section 13 in respect of small traders and dhabawallas serving cooked food and food preparations from their eateries subject to the following conditions and restrictions:-

1. That their annual gross turnover, of sales is more than Rs. 7.5 Lakhs but does not exceed Rs. 20 lakhs.

2. That the composition of tax shall be at the following rates:-

I. For dealers having their eateries within Municipal limits of Cities/Towns @ Rs. 12,000 per annum.

II. For dealers having their eateries outside Municipal limits of Cities/Towns @ Rs. 6,000 per annum.

3. That the tax shall be paid in four equal quarterly installments and shall be paid within one month from the expiry of each quarter, the dealers need not file quarterly returns.

4. That the dealers shall not collect any sum by way of tax on the sale of goods till the time their liability to pay Composite Tax exists.

5. That for failure to pay the Composite Tax in time the dealers shall besides being liable to penalty under the provisions of the Act also forfeit their claim of benefit of the Composite Tax Scheme and be liable to tax under Section 13 of the Act.

This notification shall come into force w.e.f. 0l-12-2007.

By order of the Government of Jammu and Kashmir.