Last reviewed: 20 August 2026. Composition scheme sounds simple — small turnover, flat low rate, one annual return — until you hit one of the disqualifiers that don't show up on a basic turnover check: selling through Amazon or Flipkart, an inter-state sale you didn't think twice about, or a bit of service income alongside your goods business that quietly crosses the 10%/Rs 5 lakh mixed-supply limit. This checker covers all of it.
The three composition tracks
| Category | Turnover limit | Rate |
|---|---|---|
| Goods (traders/manufacturers) | Rs 1.5 crore (Rs 75 lakh in special category states) | 1% (0.5% CGST + 0.5% SGST) |
| Restaurant services (no alcohol) | Rs 1.5 crore | 5% (2.5% CGST + 2.5% SGST) |
| Other services (Section 10(2A)) | Rs 50 lakh | 6% (3% CGST + 3% SGST) |
GST Composition Scheme Checker
Covers the goods/restaurant/services rate split and the disqualifiers most calculators miss, including the mixed-supply allowance for goods dealers.
What composition dealers give up
No input tax credit on purchases, and no separate GST charged to customers — the flat rate has to be absorbed into your pricing, not added on top like standard GST. For a business with meaningful input costs carrying substantial GST (imported raw materials, capital equipment, significant B2B purchases), losing ITC can outweigh the lower headline rate; the composition scheme tends to suit businesses with thin input costs and mostly retail/end-consumer sales, not capital-intensive or B2B-heavy ones.
The mixed-supply trap for goods dealers
A goods dealer can supply services worth up to 10% of turnover or Rs 5 lakh (whichever is higher) without losing eligibility — a hardware store that also does the occasional installation job, for instance. Cross that limit and the entire registration falls out of composition, not just the service portion. Businesses that started as pure goods dealers and gradually added service income (installation, AMC contracts, consulting) are the ones most likely to breach this without noticing.
Frequently asked questions
Can a goods dealer under composition also offer some services?
Yes, up to a limit. Since the CGST (Amendment) Act, 2018, a composition dealer registered for goods can supply services worth up to 10% of turnover or Rs 5 lakh, whichever is higher, without losing eligibility or having to register separately for services. Cross that limit and the composition option is lost for the goods business too — it isn't just the service portion that falls out, the whole registration reverts to the regular scheme.
Why can't composition dealers sell through Amazon, Flipkart, or similar platforms?
Because those platforms are required to collect Tax Collected at Source (TCS) under Section 52 on behalf of sellers, and the composition scheme is structured around dealers not collecting tax separately from customers at all — the two mechanisms don't fit together under current law. A composition dealer wanting to sell via e-commerce would need to opt out of composition and move to the regular scheme first.
What's the actual benefit of composition over the regular GST scheme?
A flat, low tax rate (1% goods, 5% restaurants, 6% other services) on turnover instead of calculating tax on every invoice at standard rates, plus quarterly payment (Form CMP-08) with only one annual return (GSTR-4) instead of monthly/quarterly return filings. The trade-off: composition dealers cannot claim input tax credit on their purchases, and cannot charge GST separately to customers — the flat rate is meant to be absorbed into pricing.
Can a restaurant serving alcohol use the 5% composition rate?
No — the 5% composition rate is specifically for restaurant services not serving alcohol. A restaurant or bar serving alcoholic beverages alongside food falls outside the composition scheme's restaurant category and needs to evaluate eligibility as a regular taxpayer, since alcohol for human consumption itself sits outside GST altogether and complicates the composition math.
I run a service business with Rs 45 lakh turnover — which composition rate applies, 1% or 6%?
6%, under the separate services-composition scheme (Section 10(2A)), which has its own Rs 50 lakh turnover ceiling distinct from the Rs 1.5 crore goods-dealer limit. The 1% rate applies only to genuine goods dealers (traders/manufacturers), not to businesses whose primary supply is services.
If I opt into composition now, can I switch back to the regular scheme later?
Yes, you can opt out voluntarily any time by filing Form CMP-04, and you must file it within 7 days if your turnover crosses the applicable threshold mid-year. Once you exit, whether voluntarily or by exceeding the limit, you generally cannot re-opt for composition again during the same financial year — the next opportunity is from the start of the following financial year via Form CMP-02.
Does composition scheme eligibility depend on my turnover this year, or last year?
The preceding financial year's aggregate turnover is what determines eligibility for the year you're opting in for. If you crossed the threshold last year, you're not eligible to opt in for this year even if this year's turnover so far looks lower — and conversely, staying under the threshold last year qualifies you to opt in even if you expect growth this year (subject to exiting mid-year if you do cross it).
We handle GST registration, composition opt-in/opt-out and ongoing compliance end to end.
GST registration GST notice handling Talk to usThis checker reflects composition scheme rules as reviewed on 20 August 2026. Aggregate turnover for eligibility is calculated PAN-wide across all your GSTINs, not per registration — confirm your exact figures and current-year eligibility with us before filing Form CMP-02. Related reading: GST Registration Checker: Do You Need a GSTIN? and GST Registration Online: Complete Guide.