The Classic Partners LLP

GST Composition Scheme for Goods

Simplified GST registration and compliance under the Composition Scheme for small traders, manufacturers, and dealers of goods. Pay GST at a low fixed rate on turnover, file quarterly returns, and reduce the compliance burden — all handled by experienced Chartered Accountants.

What is the GST Composition Scheme for Goods?

The GST Composition Scheme is a simplified taxation option under Section 10 of the CGST Act designed for small taxpayers dealing in goods. Instead of paying GST at standard rates and complying with monthly filings, an eligible taxpayer pays GST at a fixed concessional rate on the aggregate turnover and files a single quarterly statement (CMP-08) and an annual return (GSTR-4).

For manufacturers and traders of goods, the applicable composition rate is 1% of turnover (0.5% CGST + 0.5% SGST). For restaurants not serving alcohol, it is 5%. The scheme reduces paperwork, simplifies tax payment, and is ideal for small businesses with limited resources. To switch, see our GST Registration Services.

Eligibility for Composition Scheme

Aggregate turnover in the preceding financial year does not exceed ₹1.5 crore (₹75 lakh for special category states).
The taxpayer must be engaged in the supply of goods, restaurant services, or a limited supply of other services up to 10% of turnover or ₹5 lakh.
Must not be engaged in the inter-state outward supply of goods.
Must not supply goods through e-commerce operators that collect TCS.
Must not be a manufacturer of notified goods such as ice cream, pan masala, tobacco, or aerated water.
Must not be a casual taxable person or non-resident taxable person.

Our Composition Scheme Services

Composition Registration

Filing Form GST CMP-02 to opt into the scheme, with eligibility review and documentation support.

Quarterly CMP-08 Filing

Timely preparation and filing of the quarterly statement of self-assessed tax under the composition scheme.

Annual GSTR-4 Filing

Accurate annual return filing summarising all outward and inward supplies for composition taxpayers.

Transition to Regular Scheme

Smooth migration from composition to regular GST when turnover crosses the limit, with full ITC reconciliation.

Composition Advisory

Eligibility checks, rate computation, and bill-of-supply formatting to keep your business fully compliant.

Related GST Amendments

Changes to business details after opting in. See GST Registration Change & Amendment.

Benefits of the Composition Scheme

Lower tax rates — only 1% on turnover for traders and manufacturers of goods.
Reduced compliance with just one quarterly statement and one annual return.
Improved cash flow as GST is paid out of pocket on a lower rate instead of full output tax.
Simpler invoicing using a bill of supply instead of a tax invoice.
Less audit pressure due to limited record-keeping requirements.

Why Choose The Classic Partners

Specialised composition advisory for traders, manufacturers, and retail businesses.
End-to-end filing from CMP-02 opt-in to quarterly and annual returns.
Eligibility safeguards to prevent inadvertent breach of scheme conditions.
Transparent pricing tailored for small-business budgets.

Frequently Asked Questions

What is the turnover limit for the GST composition scheme?

The aggregate turnover limit is ₹1.5 crore in the preceding financial year for most states and ₹75 lakh for special category states. Once the limit is crossed during a financial year, the taxpayer must exit the scheme and shift to the regular GST regime.

Can a composition dealer collect GST from customers?

No. A composition taxpayer cannot charge or collect GST separately from customers. The GST liability is paid out of the dealer's own funds at the prescribed composition rate on total turnover, and a bill of supply is issued instead of a tax invoice.

What is the GST rate under the composition scheme for goods?

Manufacturers and traders of goods pay 1% of turnover (0.5% CGST + 0.5% SGST). Restaurants not serving alcohol pay 5% (2.5% CGST + 2.5% SGST). Other notified service providers pay 6% on first ₹50 lakh of turnover.

Can a composition dealer claim input tax credit?

No. Composition taxpayers cannot claim input tax credit on purchases. The trade-off is simpler compliance and a much lower tax rate on outward turnover.

Which returns are filed under the composition scheme?

A composition taxpayer files Form GST CMP-08 quarterly to declare tax payable, and Form GSTR-4 annually as the consolidated return. Our team handles both filings to ensure full compliance and avoid late fees.

Can a composition dealer make inter-state sales?

No. Composition dealers are not permitted to make inter-state outward supplies of goods. If you intend to sell across state borders, you must opt for regular registration. Explore our GST Registration Services for the right option.

Save Tax with the Composition Scheme

Find out if your business qualifies and let our experts handle the registration and quarterly filings.