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CGST Act Section 10 & 10(2A) Relief

Composition Scheme Calculator

Free online composition calculator to compute quarterly Form CMP-08 tax liability and verify eligibility against the latest GST composition scheme limit for small businesses.

Special Category States: Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura & Uttarakhand.

CMP-08 Tax Period
₹
Presets:
Eligibility Check
Lakhs
Presets:

Quarterly CMP-08 Tax Summary

Form CMP-08
Quarterly Turnover₹ 15,00,000.00
CGST (0.5%)₹ 7,500.00
SGST (0.5%)₹ 7,500.00
Total Tax Payable₹ 15,000.00
✓ Eligible for Composition Scheme

Projected annual turnover of ₹60 Lakhs is below the threshold limit of ₹1.50 Crore.

CMP-08 Payment DeadlineQuarterly

Form CMP-08 and tax payment must be completed by the 18th of the month following each quarter (18th July, 18th Oct, 18th Jan, and 18th April).

Key Composition Scheme Rules:
  • No inter-state outward supply of goods or services.
  • Cannot collect GST from customers (issue Bill of Supply).
  • No Input Tax Credit (ITC) can be claimed on inward purchases.
  • Annual return Form GSTR-4 must be filed by 30th April.

GST Composition Scheme Calculator — Section 10 Relief for Small Businesses

The composition scheme under Indian Goods and Services Tax is a simplified tax mechanism enacted under Section 10 of the CGST Act, 2017. Designed to alleviate compliance pressure on small traders, manufacturers, restaurant operators, and service providers, it replaces monthly return filings with a straightforward quarterly payment system.

Enrolled businesses pay a nominal, fixed percentage of their aggregate turnover instead of computing detailed input tax credits (ITC). Quarterly tax payments are remitted through Form CMP-08, followed by a single annual return via Form GSTR-4.

Our free online composition calculator enables taxpayers and tax consultants to instantly compute quarterly CMP-08 liabilities and confirm eligibility against statutory turnover thresholds under the composition scheme under gst.

GST Composition Scheme Limit & Eligibility Thresholds (2026)

To qualify for the gst composition scheme, a business's aggregate annual turnover in the preceding financial year must remain strictly within statutory ceiling limits:

Business CategoryNormal StatesSpecial Category StatesCGST Section
Manufacturers & Traders₹1.50 Crore₹75 LakhsSection 10(1)
Restaurants (Non-Alcoholic)₹1.50 Crore₹75 LakhsSection 10(1)(b)
Service Providers & Mixed Suppliers₹50 Lakhs₹50 LakhsSection 10(2A)

The general gst composition scheme limit for goods suppliers is ₹1.50 Crore. In 8 Special Category States (Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Uttarakhand), the limit is ₹75 Lakhs. For service providers, Section 10(2A) sets a uniform ceiling of ₹50 Lakhs nationwide.

Applicable Tax Rates Under the GST Composition Scheme

Tax rates under gst composition are substantially lower than regular GST slabs, structured as follows:

1% Overall

Manufacturers & Traders

0.5% CGST + 0.5% SGST. Traders pay 1% on taxable turnover, while manufacturers pay on aggregate turnover.

5% Overall

Restaurants (Non-Alcoholic)

2.5% CGST + 2.5% SGST on total turnover for food and beverage outlets not serving liquor.

6% Overall

Service Providers

3% CGST + 3% SGST under Section 10(2A) for eligible service businesses up to ₹50 Lakhs turnover.

Our composition calculator automatically calculates the exact CGST and SGST bifurcation for direct entry into your CMP-08 statement.

Who Cannot Opt for the Composition Scheme Under GST?

Certain business categories and transactions are strictly prohibited under the composition scheme under gst:

  • ✕Inter-State Outward Supplies: Dealers cannot make sales outside their home state. Inward inter-state purchases, however, remain permitted.
  • ✕No Tax Collection from Customers: Taxpayers cannot collect GST on customer bills and must fund the tax liability from business revenue.
  • ✕No Input Tax Credit (ITC): Composition dealers cannot claim credit for GST paid on purchases or capital goods.
  • ✕Prohibited Goods & E-Commerce: Manufacturers of ice cream, pan masala, tobacco, aerated water, and fly ash bricks, as well as e-commerce suppliers collecting TCS, cannot enroll.
  • ✕Non-Resident & Casual Taxpayers: Casual taxable persons and non-resident taxable entities cannot register under Section 10.

Key Compliance Rules for Composition Dealers

Taxpayers registered under gst composition must fulfill these essential statutory requirements:

Issue Bill of Supply

Dealers must issue a Bill of Supply mentioning "Composition taxable person, not eligible to collect tax on supplies" instead of a regular tax invoice.

Mandatory Signboard Notice

The words "Composition Taxable Person" must be displayed on all business notices and signboards under Rule 5 of the CGST Rules.

Quarterly Form CMP-08

Tax liabilities are paid quarterly by the 18th of the month following each quarter (18th July, Oct, Jan, and April).

Annual Form GSTR-4

A single annual return in Form GSTR-4 must be filed by 30th April following the close of the financial year.

How to Use This Composition Calculator Online

Estimating your tax liability and verifying your status against the gst composition scheme limit requires four simple steps:

  1. 1
    Select Category: Choose Manufacturers & Traders (1%), Restaurants (5%), or Service Providers (6%).
  2. 2
    Choose State: Select Normal States (₹1.50 Cr limit) or Special Category States (₹75L limit).
  3. 3
    Enter Revenue: Input quarterly turnover for CMP-08 tax and projected annual turnover to check eligibility.
  4. 4
    View Results: Read your exact CGST, SGST, total payable amount, and threshold verification instantly.

Advantages vs. Disadvantages of GST Composition

Key Benefits

  • Only 5 annual filings (4 quarterly CMP-08 + 1 annual GSTR-4) vs. 25+ regular returns.
  • Nominal tax rates (1%, 5%, 6%) preserve operating margins.
  • No need for complex invoice-level bookkeeping or ITC reconciliation.

Key Limitations

  • Outward sales are strictly restricted within the home state.
  • Zero input tax credit on purchases, increasing effective input costs.
  • B2B clients cannot claim ITC on bills issued by composition dealers.

Frequently Asked Questions — GST Composition Scheme

A business is eligible to register as a composition dealer if its aggregate annual turnover in the preceding financial year was up to ₹1.50 Crore for manufacturers and goods traders (₹75 Lakhs in 8 Special Category States: Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Uttarakhand), up to ₹1.50 Crore for restaurants not serving alcohol, or up to ₹50 Lakhs for service providers under Section 10(2A). The business must only supply goods or services within its home state (intra-state only) and cannot supply goods through an e-commerce operator collecting TCS.
You can verify whether a GST registration is composition or regular in three ways: (1) GST Portal Search: Visit gst.gov.in > Search Taxpayer > Search by GSTIN/UIN. The 'Taxpayer Type' field explicitly states 'Composition' or 'Regular'. (2) Invoices Issued: Regular taxpayers issue a 'Tax Invoice' showing itemized CGST/SGST/IGST rates, while composition dealers issue a 'Bill of Supply' bearing the mandatory declaration: 'Composition taxable person, not eligible to collect tax on supplies'. (3) GST Certificate: Check Box 7 on your GST Registration Certificate (Form GST REG-06).
Under the composition scheme, GST is paid quarterly through Form CMP-08 by the 18th of the month following each quarter (18th July, 18th October, 18th January, and 18th April). To pay: (1) Log in to the GST Portal (gst.gov.in) and open the Returns Dashboard. (2) Select the quarter and click 'Prepare Online' under Form CMP-08. (3) Enter the aggregate value of outward supplies and inward supplies liable to reverse charge (RCM). (4) Generate payment challan (PMT-06) and pay via Net Banking, NEFT/RTGS, or over-the-counter to fund your Electronic Cash Ledger. (5) File CMP-08 using DSC or EVC. Additionally, file an annual return in Form GSTR-4 by 30th April following the financial year.
The right choice depends on your business model: The Composition Scheme is better for small retailers, local restaurants, and service providers who sell directly to end consumers (B2C) within one state, as it provides lower flat tax rates (1%, 5%, 6%) and minimal compliance (quarterly CMP-08 + 1 annual GSTR-4 instead of 25+ monthly returns). Regular GST is better for businesses that sell B2B (since B2B clients demand tax invoices to claim Input Tax Credit), businesses engaged in inter-state commerce, e-commerce sellers, or businesses with high tax-paid purchases where claiming Input Tax Credit (ITC) significantly reduces costs.
The aggregate annual turnover limit for the GST composition scheme is: (1) ₹1.50 Crore for manufacturers and traders of goods in normal states. (2) ₹75 Lakhs for manufacturers and traders in 8 Special Category States (Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Uttarakhand). (3) ₹1.50 Crore for restaurants not serving alcoholic liquor. (4) ₹50 Lakhs for service providers and mixed suppliers under Section 10(2A) across all states. If turnover crosses these limits at any time during the financial year, the taxpayer must exit the scheme within 7 days by filing Form GST CMP-04.
The main limitations of the GST composition scheme are: (1) No Inter-State Outward Sales: Dealers cannot make sales outside their home state (inter-state purchases are allowed). (2) No Input Tax Credit (ITC): Cannot claim credit for GST paid on purchases or capital goods. (3) Cannot Collect GST: Cannot collect tax from customers or issue tax invoices (must issue a Bill of Supply). (4) No B2B Tax Credit: B2B customers cannot claim ITC on bills issued by composition dealers. (5) No E-Commerce: Cannot sell through e-commerce operators collecting TCS. (6) Ineligible Goods: Manufacturers of ice cream, pan masala, tobacco, and aerated water cannot opt into the scheme.
For new GST registration under the composition scheme (Form GST REG-01), the required documents are: (1) PAN Card of the business/proprietor/partners/directors. (2) Aadhaar Card of authorized signatory and promoters. (3) Proof of business registration (Partnership Deed, Certificate of Incorporation, etc.). (4) Proof of business address (Electricity bill, property tax receipt, or rent agreement with NOC). (5) Bank account proof (Cancelled cheque or bank passbook/statement with account number and IFSC). (6) Passport-size photograph of proprietor/partners/directors. For existing regular taxpayers opting into composition, file Form GST CMP-02 online on the GST portal before the start of the financial year (no physical documents required), and file Form GST ITC-03 within 60 days to reverse unutilized ITC on stock.

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