{"id":59,"date":"2026-03-18T09:51:47","date_gmt":"2026-03-18T09:51:47","guid":{"rendered":"https:\/\/adwaniandco.com\/wpblogs\/?p=59"},"modified":"2026-08-06T08:31:59","modified_gmt":"2026-08-06T08:31:59","slug":"gst-composition-scheme","status":"publish","type":"post","link":"https:\/\/adwaniandco.com\/wpblogs\/gst-composition-scheme\/","title":{"rendered":"GST Composition Scheme: A Complete Guide for Small Businesses"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><strong>GST Composition Scheme<\/strong><\/h3>\n\n\n\n<p>Running a small business in India is no easy task. Between managing customers, handling suppliers, and keeping track of finances, compliance with tax laws often feels like an added burden. That\u2019s where the<a href=\"https:\/\/www.linkedin.com\/posts\/adwani-co-llp_consulting-artificialintelligence-businessadvisory-activity-7435622064583188480-33hu?utm_source=share&amp;utm_medium=member_desktop&amp;rcm=ACoAACWMjg4BAE_6yYV2-YkonTQdtbGco6IGbps\" data-type=\"link\" data-id=\"https:\/\/www.linkedin.com\/posts\/adwani-co-llp_consulting-artificialintelligence-businessadvisory-activity-7435622064583188480-33hu?utm_source=share&amp;utm_medium=member_desktop&amp;rcm=ACoAACWMjg4BAE_6yYV2-YkonTQdtbGco6IGbps\" target=\"_blank\" rel=\"noopener\"><strong>Goods and Services Tax (GST)<\/strong><\/a> comes in a unified tax system designed to simplify indirect taxation. <\/p>\n\n\n\n<p>But even GST can feel complicated for small traders and entrepreneurs who don\u2019t have the resources to maintain detailed records or hire full-time accountants.<\/p>\n\n\n\n<p> To address this challenge, the government introduced the <strong>GST Composition Scheme<\/strong>. instead of calculating taxes at multiple rates, filing monthly returns, and claiming input credits, you pay a fixed percentage of your turnover and file simplified returns. This scheme is not only a relief for small businesses but also a way to encourage voluntary compliance and bring more enterprises into the formal economy.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Overview<\/strong><\/h2>\n\n\n\n<p>The <strong>GST Composition Scheme<\/strong> is essentially a <strong>simplified tax regime<\/strong> designed for small taxpayers. It allows eligible businesses to pay GST at a fixed lower rate on their turnover, instead of the standard rates that range from 5% to 28%.<\/p>\n\n\n\n<p>Here\u2019s why it matters:<\/p>\n\n\n\n<p><strong>Ease of compliance<\/strong>: Small businesses often struggle with the complex GST framework. The composition scheme reduces this burden by requiring fewer returns and simpler record keeping.<\/p>\n\n\n\n<p><strong>Predictable tax liability<\/strong>: Instead of worrying about varying tax rates on different goods and services, businesses pay a flat percentage of turnover.<\/p>\n\n\n\n<p><strong>Encouragement for small enterprises<\/strong>: By lowering compliance costs, the scheme motivates small traders and manufacturers to register under GST rather than operate informally.<\/p>\n\n\n\n<p><strong>Government\u2019s objective<\/strong>: The scheme is part of India\u2019s broader push to formalize the economy, widen the tax base, and ensure that even micro and small businesses contribute to GST in a manageable way.<\/p>\n\n\n\n<p>However, the scheme has some limitations. Businesses opting for it cannot claim <strong>Input Tax Credit (ITC)<\/strong>, cannot supply goods or services outside their state, and must operate within specified turnover limits. This makes it ideal for local businesses with modest operations, but less suitable for enterprises planning rapid expansion or interstate trade.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>&nbsp;<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/adwaniandco.com\/wpblogs\/wp-content\/uploads\/2026\/03\/WhatsApp-Image-2026-03-16-at-7.16.19-PM-1024x683.jpeg\" alt=\"\" class=\"wp-image-60\" srcset=\"https:\/\/adwaniandco.com\/wpblogs\/wp-content\/uploads\/2026\/03\/WhatsApp-Image-2026-03-16-at-7.16.19-PM-1024x683.jpeg 1024w, https:\/\/adwaniandco.com\/wpblogs\/wp-content\/uploads\/2026\/03\/WhatsApp-Image-2026-03-16-at-7.16.19-PM-300x200.jpeg 300w, https:\/\/adwaniandco.com\/wpblogs\/wp-content\/uploads\/2026\/03\/WhatsApp-Image-2026-03-16-at-7.16.19-PM-768x512.jpeg 768w, https:\/\/adwaniandco.com\/wpblogs\/wp-content\/uploads\/2026\/03\/WhatsApp-Image-2026-03-16-at-7.16.19-PM.jpeg 1536w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Applicability for Registration<\/strong><\/h2>\n\n\n\n<p>The Composition Scheme applies to specific categories of taxpayers:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Eligible Businesses<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Manufacturers<\/strong> (except manufacturers of ice cream, pan masala, tobacco).<\/li>\n\n\n\n<li><strong>Traders<\/strong> (dealers in goods).<\/li>\n\n\n\n<li><strong>Restaurants<\/strong> (not serving alcohol).<\/li>\n\n\n\n<li><strong>Service Providers<\/strong> (under Section 10(2A), with turnover up to \u20b950 lakh<strong>).<\/strong><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Not Eligible<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Businesses making <strong>interstate supply of goods\/services<\/strong>.<\/li>\n\n\n\n<li>Businesses supplying goods through <strong>ecommerce operators<\/strong>.<\/li>\n\n\n\n<li>Businesses dealing in <strong>nontaxable goods<\/strong> (like alcohol, petroleum products).<\/li>\n\n\n\n<li>Casual taxable persons and nonresident taxable person<\/li>\n\n\n\n<li>Manufacturers of restricted goods (ice cream, pan masala, tobacco).<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<p>Also Read : <a href=\"https:\/\/adwaniandco.com\/blog\/medical-tourism-in-india-regulatory-fema-and-gst-framework\">Medical Tourism in India: Regulatory, FEMA and GST Framework | Adwani &amp; Co LLP<\/a><\/p>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Registration under GST Composition Scheme<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Eligible taxpayers must <strong>apply via GST portal<\/strong> using Form <strong>GST CMP 02.<\/strong><\/li>\n\n\n\n<li>Registration is voluntary but once opted, the taxpayer must comply with scheme rules.<\/li>\n\n\n\n<li>Businesses must declare their choice at the beginning of the financial year.<\/li>\n\n\n\n<li>Stock Declaration (Form GST CMP03)<\/li>\n\n\n\n<li>Bill of Supply Instead of Tax Invoice<\/li>\n<\/ul>\n\n\n\n<p><strong>Mandatory Display<\/strong><\/p>\n\n\n\n<p>At every place of business, a signboard must be displayed stating: <em>\u201cComposition Taxable Person under GST.<\/em><\/p>\n\n\n\n<p><strong>Exit from Scheme<\/strong><\/p>\n\n\n\n<p>If turnover exceeds the prescribed limit, the taxpayer must <strong>shift to the regular GST Composition scheme<\/strong> immediately.<\/p>\n\n\n\n<p>Voluntary withdrawal is also allowed by filing an intimation on the GST portal.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Turnover Limits : The Criteria<\/strong><\/h2>\n\n\n\n<p>The <strong>turnover limit<\/strong> is the most important eligibility condition for opting into the GST Composition Scheme. It defines the maximum annual sales a business can have while still enjoying the benefits of simplified tax compliance.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>\u20b91.5 crore<\/strong> \u2192 For most states in India.<\/li>\n\n\n\n<li><strong>\u20b975 lakhs<\/strong> \u2192 For special category states (like Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand).<\/li>\n\n\n\n<li><strong>\u20b950 lakhs<\/strong> \u2192 For service providers under Section 10(2A).<\/li>\n<\/ul>\n\n\n\n<p> If a business crosses these limits during the financial year, it must <strong>exit the GST composition scheme<\/strong> and shift to the regular GST regime immediately.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Why Turnover Limits Matter<\/strong><\/h2>\n\n\n\n<p>Turnover limits are not just numbers  they determine whether a business can enjoy the <strong>simplicity of composition levy<\/strong> or must comply with the <strong>full GST framework<\/strong>. Let\u2019s break it down by business role:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Manufacturers<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Eligible up to <strong>\u20b91.5 crore turnover<\/strong> (\u20b975 lakhs in special states).<\/li>\n\n\n\n<li>Pay <strong>1% of turnover<\/strong> as tax.<\/li>\n\n\n\n<li>For small-scale manufacturers (like local furniture makers or textile units), this limit allows them to avoid complex ITC calculations.<\/li>\n\n\n\n<li>But if they expand and cross the limit, they must shift to regular GST, which means higher compliance and monthly filings.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Traders (Dealers in Goods)<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Eligible up to <strong>\u20b91.5 crore turnover<\/strong> (\u20b975 lakhs in special states).<\/li>\n\n\n\n<li>Pay <strong>1% of turnover<\/strong> as tax.<\/li>\n\n\n\n<li>For shopkeepers, wholesalers, and local traders, this limit is crucial. It allows them to keep compliance simple while focusing on sales.<\/li>\n\n\n\n<li>Once turnover grows beyond the threshold, they must adopt regular GST, which may require professional accounting support.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Restaurants (Not Serving Alcohol)<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Eligible up to <strong>\u20b91.5 crore turnover<\/strong> (\u20b975 lakhs in special states).<\/li>\n\n\n\n<li>Pay <strong>5% of turnover<\/strong> as tax.<\/li>\n\n\n\n<li>For small eateries, caf\u00e9s, and local restaurants, this scheme is attractive because they don\u2019t need to calculate ITC on food ingredients.<\/li>\n\n\n\n<li>However, if they expand into chains or cross the turnover limit, they must move to regular GST.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Service Providers (Section 10(2A))<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Eligible up to <strong>\u20b950 lakh turnover<\/strong>.<\/li>\n\n\n\n<li>Pay <strong>6% of turnover<\/strong> as tax.<\/li>\n\n\n\n<li>This applies to small service providers like consultants, repair shops, or local agencies.<\/li>\n\n\n\n<li>The lower limit reflects the government\u2019s cautious approach, since services often involve interstate clients.<\/li>\n\n\n\n<li>&nbsp;If turnover crosses \u20b950 lakh, the business must shift to regular GST. This means monthly filings and ITC compliance sings.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Aggregate Turnover : The Fine Print<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Turnover is calculated as <strong>aggregate turnover under one PAN<\/strong>, across all states.<\/li>\n\n\n\n<li>It includes:<ul><li>Taxable supplies<\/li><\/ul><ul><li>Exempt supplies<\/li><\/ul><ul><li>Exports<\/li><\/ul>\n<ul class=\"wp-block-list\">\n<li>Interstate supplies<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>It excludes:\n<ul class=\"wp-block-list\">\n<li>GST and cess amounts.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li> This means if a business has multiple branches, the combined turnover is considered, not just one branch.<\/li>\n<\/ul>\n\n\n\n<p><em>Example:<\/em> \u201cA trader has \u20b960 lakhs taxable turnover and \u20b930 lakh exempt turnover. His aggregate turnover is \u20b990 lakhs, which is used to check eligibility  not just the \u20b960 lakh taxable part.\u201d<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Turnover Limits for Specified States<\/strong><\/h2>\n\n\n\n<p>The GST law recognizes certain states as <strong>special category states<\/strong> because of their unique economic conditions, smaller markets, and geographical challenges. For these states, the turnover limit for opting into the Composition Scheme is <strong>lower<\/strong> than the general limit.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>General Limit (Most States):<\/strong> \u20b91.5 crore<\/li>\n\n\n\n<li><strong>Special Category States Limit:<\/strong> \u20b975 lakh<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>List of Special Category States<\/strong><\/h3>\n\n\n\n<p>The following states fall under the specified category with the reduced limit of \u20b975 lakhs:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Arunachal Pradesh<\/li>\n\n\n\n<li>Manipur<\/li>\n\n\n\n<li>Meghalaya<\/li>\n\n\n\n<li>Mizoram<\/li>\n\n\n\n<li>Nagaland<\/li>\n\n\n\n<li>Sikkim<\/li>\n\n\n\n<li>Tripura<\/li>\n\n\n\n<li>Uttarakhand<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Why the Limit is Lower<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>These states have <strong>smaller business ecosystems<\/strong> compared to larger states like Maharashtra or Karnataka.<\/li>\n\n\n\n<li>The reduced limit ensures that only truly small businesses benefit from simplified compliance.<\/li>\n\n\n\n<li>It also helps the government maintain better tax control in regions where interstate trade is limited but local businesses are numerous.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Specified states have a reduced turnover limit of \u20b975 lakhs<\/strong> for manufacturers, traders, and restaurants.<\/li>\n\n\n\n<li>Service providers everywhere have a <strong>\u20b950 lakh limit<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">What happens if your turnover crosses the limit mid year?<\/h2>\n\n\n\n<p>From the date your turnover crosses the limit, you must:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Switch to the regular GST scheme.<\/li>\n\n\n\n<li>Start issuing tax invoices instead of Bills of Supply.<\/li>\n\n\n\n<li>Begin filing monthly\/quarterly returns under the normal GST rules.<\/li>\n<\/ul>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Law does not allows ypu a grace period to stay in composition until the F.y ends<\/li>\n\n\n\n<li>Immediate exit in Mandatory<\/li>\n\n\n\n<li>For turnover beyond \u20b91.5 crore, you pay regular GST from the date of crossing. <\/li>\n\n\n\n<li>File CMP\u201104 (intimation of withdrawal).<\/li>\n\n\n\n<li>Start filing GSTR\u20111 and GSTR\u20113B under the regular scheme.<\/li>\n<\/ol>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Act of Assets in GST Composition Scheme<\/strong><\/h2>\n\n\n\n<p>When a business opts for the GST Composition Scheme, its treatment of <strong>assets<\/strong> (like machinery, furniture, vehicles, computers, etc.) is different compared to regular GST taxpayers.<\/p>\n\n\n\n<p><strong>No Input Tax Credit (ITC) on Assets<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: revert; letter-spacing: -0.1px;\">If you purchase assets (say, machinery for manufacturing), the GST you pay on those purchases <\/span><strong style=\"font-size: revert; letter-spacing: -0.1px;\">cannot be claimed back<\/strong><span style=\"font-size: revert; letter-spacing: -0.1px;\"> under the composition scheme.<\/span><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In the regular GST system, businesses can claim ITC and reduce their tax liability. But composition taxpayers lose this benefit.<\/li>\n<\/ul>\n\n\n\n<p><strong>Assets Remain Part of Business<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: revert; letter-spacing: -0.1px;\">Even though ITC is not available, the assets are still recorded and used in the business.<\/span><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>They form part of the balance sheet and depreciation can be claimed under income tax laws, but not under GST.<\/li>\n<\/ul>\n\n\n\n<p><strong>Stock Declaration Requirement<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: revert; letter-spacing: -0.1px;\">When opting into composition, businesses must declare their stock and assets using <\/span><strong style=\"font-size: revert; letter-spacing: -0.1px;\">Form CMP\u201103<\/strong><span style=\"font-size: revert; letter-spacing: -0.1px;\">.<\/span><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>This ensures transparency, since ITC on those assets will not be carried forward.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><strong>Asset Acceptance Rules<\/strong><\/strong><\/h2>\n\n\n\n<p>Asset acceptance\u201d here refers to how GST law treats assets when a business moves into or out of the composition scheme.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>On Entering Composition Scheme<\/strong><br>1.   Any ITC previously claimed on assets must be reversed.<br><br>2. Businesses must accept that they cannot use ITC on future purchases of assets.<br><\/li>\n\n\n\n<li><strong>On Exiting Composition Scheme<\/strong><ol><li>If turnover exceeds the limit and the business shifts to regular GST, ITC on existing assets can be claimed prospectively.This means the business regains the benefit of ITC once it moves out of composition.<\/li><\/ol><\/li>\n\n\n\n<li><\/li>\n\n\n\n<li><strong>Capital-Intensive Businesses<\/strong><br>1. <span style=\"letter-spacing: -0.1px;\">For businesses that rely heavily on assets (like manufacturing plants), composition may not be ideal because they lose ITC benefits.<\/span><br><br>2.For small traders or restaurants with fewer assets,   composition is more practical.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Tax Rates in the Composition Scheme<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Manufacturers &amp; Traders<\/strong>: The 1% of Turnover &nbsp;<\/li>\n<\/ul>\n\n\n\n<p>It keeps compliance simple for local shopkeepers and small producers.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Restaurants<\/strong>: The 5% Of Turnover<\/li>\n<\/ul>\n\n\n\n<p>balances affordability with revenue collection.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Service Providers<\/strong>: The 6% of Turnover<\/li>\n<\/ul>\n\n\n\n<p>it allows small firms (consultants, repair shops, agencies) to avoid monthly filings and ITC complexities. Applies to small service firms with turnover less than \u20b950 lakhs.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong> Why Tax Rates Are Really Matters<\/strong><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Simplification of Compliance<\/strong><\/li>\n\n\n\n<li><strong>Predictability of Tax Liability<\/strong><\/li>\n\n\n\n<li><strong>Encouragement for Small Businesses<\/strong><\/li>\n\n\n\n<li><strong>No ITC Benefit<\/strong><\/li>\n\n\n\n<li><strong>Sector-Specific Relief<\/strong><\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Important Legal Sections<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Section 10  Composition Levy<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>This section is the foundation of the Composition Scheme.<\/li>\n\n\n\n<li>Provides the legal framework for eligibility, turnover limits, tax rates, and restrictions.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Section 10(1)<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>States that a registered person whose <strong>aggregate turnover<\/strong> in the preceding financial year did not exceed the prescribed limit may opt to pay tax under the composition scheme.<\/li>\n\n\n\n<li>In simple terms: this clause defines <strong>who can join the scheme<\/strong> based on turnover.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Section 10(2A)<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Special Services For a small<strong> service providers ,<\/strong>with turnover up to \u20b950 lakh to opt for composition levy.<\/li>\n\n\n\n<li>Tax rate applicable: <strong>6% of turnover<\/strong>.<\/li>\n\n\n\n<li>&nbsp;It widened the scope of the scheme beyond traders and manufacturers.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Section 2(a)  Aggregate Turnover<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Defines <strong>aggregate turnover<\/strong> as the total value of:<ul><li>Taxable supplies<\/li><\/ul><ul><li>Exempt supplies<\/li><\/ul><ul><li>Exports<\/li><\/ul>\n<ul class=\"wp-block-list\">\n<li>Interstate supplies<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Calculated on a <strong>PAN basis<\/strong>, across all states.<\/li>\n\n\n\n<li>Excludes GST and cess.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>GST Filling Under Composition Sheme<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. CMP 08 (Quarterly Statement &amp; Payment)<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Purpose:<\/strong> To declare turnover and pay tax for the quarter.<\/li>\n\n\n\n<li><strong>Form Type:<\/strong> Statement\u2011cum\u2011challan (acts as both return and payment form).<\/li>\n\n\n\n<li><strong>Contents:<\/strong> Outward supplies, inward supplies, and self\u2011assessed tax liability.<\/li>\n\n\n\n<li><strong>Where to File:<\/strong> GST portal \u2192 Services \u2192 Returns \u2192 CMP\u201108.<\/li>\n\n\n\n<li><strong>Payment:<\/strong> Tax is paid directly through this form.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. GSTR\u20114 (Annual Return)<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Purpose:<\/strong> To provide a consolidated summary of turnover and tax paid during the year.<\/li>\n\n\n\n<li><strong>Contents:<\/strong> Details of outward supplies, inward supplies, and tax liability already discharged via CMP\u201108.<\/li>\n\n\n\n<li><strong>Where to File:<\/strong> GST portal \u2192 Services \u2192 Returns \u2192 Annual Return \u2192 GSTR\u20114.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Due Dates<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>CMP\u201108 (Quarterly)<\/li>\n<\/ul>\n\n\n\n<p><strong>18th of the month following the quarter<\/strong> (e.g., for Apr\u2013Jun quarter, due by 18th July).<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>GSTR-4(Annually)<\/li>\n<\/ul>\n\n\n\n<p><strong>30th April<\/strong> following the financial year.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1773818730892\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>What is the GST Composition Scheme and why was it introduced?<\/strong> <\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The Composition Scheme is a simplified tax system under GST designed for small taxpayers. It allows them to pay tax at a fixed percentage of turnover instead of following the regular GST rules, reducing compliance burden.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1773818742940\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong> Who is eligible to opt for the GST Composition Scheme?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Manufacturers and traders with turnover up to \u20b91.5 crore (\u20b975 lakhs in special category states).<\/p>\n<p>Restaurants (not serving alcohol) with turnover up to \u20b91.5 crore.<\/p>\n<p>Service providers with turnover up to \u20b950 lakhs (under Section 10(2A)).<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1773818810717\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong> What are the tax rates under the <strong> GST Composition <\/strong>scheme?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p><strong>1%<\/strong> of turnover for manufacturers and traders.<\/p>\n<p><strong>5%<\/strong> of turnover for restaurants (not serving alcohol).<\/p>\n<p><strong>6%<\/strong> of turnover for service providers (\u2264 \u20b950 lakh turnover).<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1773818828610\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>What returns need to be filed under the GST Composition Scheme?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p><strong>CMP 08<\/strong>: Quarterly statement and payment, due by the 18th of the month following each quarter.<\/p>\n<p><strong>GSTR 4<\/strong>: Annual return, due by 30th April after the financial year.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1773818849078\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><strong>Can GST Composition dealers claim Input Tax Credit (ITC) or make interstate sales?<\/strong><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>No. Composition dealers cannot claim ITC on purchases, and they are not allowed to make interstate supplies or sell through e\u2011commerce platforms.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n<p>About Author:&nbsp;<strong>Archana Dahibhate<\/strong><\/p>\n\n\n\n<p><strong>Archana Dahibhate<\/strong>&nbsp;is a finance professional at Adwani &amp; Co LLP, specializing in taxation, accounting, and regulatory compliance. She is passionate about simplifying complex tax and business concepts into practical insights that help businesses and individuals make informed decisions. Through her articles, she shares reliable, up-to-date guidance on taxation, GST, and financial compliance.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Disclaimer<\/strong><\/h2>\n\n\n\n<p><em>This article is intended for general informational and educational purposes only and does not constitute legal, financial, or professional tax advice. While every effort has been made to ensure accuracy based on publicly available information from the Income Tax Department as of the date of publication, tax laws and their interpretation are subject to change. Readers should consult a qualified chartered accountant or tax professional, such as the team at Adwani and Company, before making any decisions based on this content.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>GST Composition Scheme Running a small business in India is no easy task. Between managing customers, handling suppliers, and keeping track of finances, compliance with tax laws often feels like an added burden. That\u2019s where theGoods and Services Tax (GST) comes in a unified tax system designed to simplify indirect taxation. But even GST can [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":60,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[417,418,419],"class_list":["post-59","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-gst-composition-scheme","tag-registration","tag-turnover-limit"],"_links":{"self":[{"href":"https:\/\/adwaniandco.com\/wpblogs\/wp-json\/wp\/v2\/posts\/59","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/adwaniandco.com\/wpblogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/adwaniandco.com\/wpblogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/adwaniandco.com\/wpblogs\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/adwaniandco.com\/wpblogs\/wp-json\/wp\/v2\/comments?post=59"}],"version-history":[{"count":24,"href":"https:\/\/adwaniandco.com\/wpblogs\/wp-json\/wp\/v2\/posts\/59\/revisions"}],"predecessor-version":[{"id":1202,"href":"https:\/\/adwaniandco.com\/wpblogs\/wp-json\/wp\/v2\/posts\/59\/revisions\/1202"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/adwaniandco.com\/wpblogs\/wp-json\/wp\/v2\/media\/60"}],"wp:attachment":[{"href":"https:\/\/adwaniandco.com\/wpblogs\/wp-json\/wp\/v2\/media?parent=59"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/adwaniandco.com\/wpblogs\/wp-json\/wp\/v2\/categories?post=59"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/adwaniandco.com\/wpblogs\/wp-json\/wp\/v2\/tags?post=59"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}