(1) A registered dealer shall be eligible to exercise his option to pay tax under sub-section (6) of section 16 for a maximum period of one year only at a time: Provided that such registered dealer may exercise such option for any subsequent year subject to fulfilment of terms and conditions as laid down in this rule.

(2) A registered dealer opting to pay tax under sub-section (6) of section 16 for a year or part of a year shall not.

(a) have any goods in stock which were brought by him from outside the State on the day he exercises his option to pay tax by way of composition and shall not sell any such goods brought from outside the State after such date;

(b) be a dealer importing taxable goods;

(c) be a dealer selling goods in the course of inter-State trade or commerce within the meaning of section 3 of the Central Sales Tax Act, 1956;

(d) be a dealer selling goods in the course of import of goods into, or export of goods out of, the territory of India within the meaning of section 5 of the Central Sales Tax Act, 1956;

(e) be a dealer who transfers goods otherwise than by way of sale within or outside West Bengal;

(f) be a dealer who is engaged in execution of works contract; and

(g) be a dealer who receives or procures goods otherwise than by way of purchase from others from within West Bengal or from outside, where such goods are for direct use in business.

(3) If a registered dealer opting to pay tax under sub-section (6) of section 16 for a year or part of a year has claimed input tax credit on purchases of goods lying in stock with him on the date from which he opts to pay tax under sub-section (6) of section 16, he shall first reverse such input tax credit on such stock of goods before exercising option under sub-rule (5).

(4) A registered dealer may, in exercise of his option to make payment of tax under subsection (6) of section 16, pay tax for a year or part of a year, on the sales of such goods as referred to in sub-section (6) of section 16 from his hotel, mandap, restaurant or any other eating-house in West Bengal at compounded rate specified in this regard on the turnover of sales inWest Bengal of such goods as referred to in sub-section (6) of section 16 in lieu of tax payable for such year or part thereof at the rates specified under sub-section (2) of section 16.

(5) A registered dealer, exercising his option for a year or part of a year to pay tax in accordance with the provisions of sub-section (6) of section 16, shall communicate such option in Form 16, to the Additional Commissioner or the Senior Joint Commissioner or the Joint Commissioner duly authorized by the Commissioner for such purpose,-

(a) firstly, by way of transmitting the data in Form 16, either under digital signature or without any digital signature electronically through the website of the Commercial Tax Directorate, within ninety days from the date of commencement of the year in respect of which the option is so exercised or subject to the satisfaction of the appropriate authority, within such further time as may be allowed by such authority; and

(b) secondly, by way of furnishing a duly signed copy of electronic acknowledgement within fifteen days from the date of electronic submission:

Provided that a registered dealer intending to exercise his option to pay tax in accordance with the provisions of clause (c) of sub-section (6) of section 16, shall submit the Form 16, through the website of the Commercial Tax Directorate, West Bengal, within thirty days from the date of receipt of certificate of registration or subject to the satisfaction of the appropriate authority, within such further time as may be allowed by such authority, by way of transmitting the data, either under digital signature or without any digital signature electronically, in the manner laid down in clause (a) and clause (b) of this sub-rule.

(6) The registered dealer who has exercised option to pay tax under sub-section (6) of section 16 on sales from his hotel, mandap, restaurant or any other eating-house in West Bengal of such cooked foods, non-alcoholic drinks and beverages, manufactured by him in West Bengal, as are specified in Schedule CA, shall pay tax at the rates specified under sub-section (2) of section 16 of the Act in respect of all other sales of goods in West Bengal.

(7) If theturnover of sales of such goods as referred to in sub-section (6) of section 16 of the registered dealer, who has exercised option under sub-rule (5) to pay tax at the compounded rate, in a year or part of a year, exceeds twenty five lakh rupees at any time during the year or part of the year, he shall inform the appropriate assessing authority in writing within seven days from the day, when his turnover of such sales has so exceeded.

(8) The registered dealer, whose turnover of sales of such goods as referred to in sub-section (6) of section 16 exceeds twenty five lakh rupees at any time during a year, shall continue to pay tax at the compounded rate up to the end of that month in which his turnover of sales of such goods as referred to in sub-section (6) of section 16 exceeds fifteen lakh rupees, but he shall not be eligible for payment of tax at the compounded rate for the remaining part of the year and he shall be liable to pay tax on all his sales under sub-section (2) of section 16 of the Act from the beginning of the month immediately following the month in which his turnover of sales of such goods as referred to in sub-section (6) of section 16 has exceeded fifteen lakh rupees.

(9) The registered dealer who has exercised option to pay tax in terms of sub-section (6) of section 16 shall not be eligible to avail any input tax credit or input tax rebate.

(10) The provisions of sub-rule (6) and sub-rule (11) of rule 38 shall, mutatis mutandis, apply to the dealers exercising option to pay tax under sub-section (6) of section 16.