Form k (composition tax) of tnvat

Any trader whose TO is <50 lacs can go for compounding tax. But they are not eligible for input tax. They are not supposed to collect the tax also.They can opt their own No permission is required.

any vat dealer / a manufacturer -who purchases some goods from  FOM K dealer -who bills him with 0.5 % non vatable tax - how will he fills his annex1, 

is it mandatory/ compulsory to delare in his ANNEX 1