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Updated: 15th August 2026•Income-tax Act, 2025 (TY 2026-27)

GST Composition Scheme: Turnover Limits, Rates & Quarterly Compliance

जीएसटी कंपोजिशन योजना संपूर्ण मार्गदर्शक

Comprehensive guide to the GST Composition Scheme under Section 10 of the CGST Act: simplified compliance for small traders, manufacturers, restaurants, and service providers with low tax rates and quarterly CMP-08 filing.

Written by: Author Profile
Direct Tax & CA Review Panel

Chartered Accountancy Review Panel • Senior Direct Tax Review Desk

Reviewed & Fact-Checked by: Technical Review Panel
Tax Law & Dispute Review Desk

Tax Litigation & Legal Review Panel • Tax Appeal & Procedure Review Desk

Published: 1st April 2026•Last Updated: 15th August 2026•Last Reviewed: 15th August 2026

Key Statutory Highlights (FY 2026-27)

Turnover threshold: Up to ₹1.5 Crore for manufacturers and traders (₹75 Lakh in special category northeastern states).
Service providers threshold: Up to ₹50 Lakh under Section 10(2A).
Composition Tax Rates: Manufacturers @ 1% (0.5% CGST + 0.5% SGST), Traders @ 1% of taxable turnover, Restaurants @ 5%, Service Providers @ 6%.
Cannot collect GST from customers (must issue Bill of Supply) and cannot claim Input Tax Credit (ITC).
Pay tax quarterly via Form CMP-08 by 18th of month following quarter; file annual return GSTR-4 by 30th April.

Who is Eligible & When Does it Apply?

Applicability #1

Small business dealers not engaged in inter-state supplies, e-commerce sales, or manufacture of tobacco/pan masala/ice cream.

Step-by-Step Procedure & Compliance Roadmap

1

Opt In via Form GST CMP-02

Submit electronic application on the GST portal before the beginning of the financial year.

2

Issue Bill of Supply for Sales

Clearly mention 'Composition taxable person, not eligible to collect tax on supplies' on all bills.

3

File Form CMP-08 Quarterly

Deposit flat tax percentage on turnover before 18th of July, October, January, April.

4

File Annual Return Form GSTR-4

Submit comprehensive yearly statement by 30th April.

Mandatory Documents Checklist

Form GST CMP-02, Quarterly Turnover Summary, Purchase Bills

Common Mistakes & Compliance Risks to Avoid

•Making inter-state sales under composition scheme (automatically disqualifies dealer).
•Charging GST on bills to customers.

Frequently Asked Questions

Can a composition dealer sell goods through Amazon or Flipkart?

Under current statutory provisions, composition dealers can make intra-state supplies through e-commerce operators subject to specified conditions, but cannot make inter-state e-commerce sales.

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🛡️ Educational Disclaimer: FinSetu India is an independent educational guidance and calculation platform. Content is published for general citizen awareness based on applicable laws as of FY 2026-27. We do not provide personalized legal/tax advice or file returns directly. Verify current applicable rules on official portals or consult a qualified Chartered Accountant / Tax Lawyer.