Last reviewed: 25 September 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: an inter-state sale you didn't think twice about, services supplied through an e-commerce platform, 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 the notified 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) |
The lower Rs 75 lakh limit applies only in the States listed in Notification 14/2019-Central Tax: Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand. Other north-eastern and hill States, such as Assam and Himachal Pradesh, follow the Rs 1.5 crore limit. Manufacturers of ice cream, pan masala, tobacco products and aerated waters (added by Notification 43/2019-Central Tax) cannot opt in at any turnover.
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.
Worked example: a trader's preceding-year turnover is Rs 1.2 crore, and it also earns Rs 8 lakh from installation work. The services allowance is the higher of 10% of Rs 1.2 crore (Rs 12 lakh) and Rs 5 lakh, so Rs 12 lakh. Rs 8 lakh is within it, and the trader stays eligible at 1%. If installation income grew to Rs 13 lakh, the allowance would be exceeded and the whole registration would move out of composition.
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.
Can composition dealers sell on Amazon, Flipkart or similar platforms?
Yes, for goods, since 1 October 2023. The Finance Act, 2023 amended Section 10(2)(d) of the CGST Act so that the bar now covers only supplies of services through an e-commerce operator. A composition dealer in goods can sell intra-State through Amazon, Flipkart or a similar platform; the operator collects TCS under Section 52 and follows the special procedure in Notification 36/2023-Central Tax. Inter-State sales remain barred, whether made through a platform or directly, and supplying services through an e-commerce operator that collects TCS still disqualifies.
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 25 September 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.