Composition Scheme Under GST 2026
Quick Summary
Composition scheme = Simple GST for small businesses. Pay 1-6% on turnover, file quarterly, no ITC.
What is Composition Scheme?
Simplified GST scheme for small businesses with turnover up to ₹1.5 crore.
Benefits: Lower tax rate, quarterly filing, simple compliance
Drawback: Cannot claim ITC, no inter-state sales
Tax Rates
- Traders: 1% of turnover
- Manufacturers: 1% of turnover
- Restaurants: 5% of turnover
- Service Providers: 6% of turnover
Eligibility
✅ Turnover ≤ ₹1.5 Cr (₹75 lakh special states)
✅ Only intra-state sales
✅ Not selling exempt goods
❌ E-commerce sellers not eligible
Restrictions
- Cannot charge GST on invoices
- Cannot claim ITC
- Cannot make inter-state sales
- Cannot sell on e-commerce
- Must pay RCM at regular rates
How to Opt
- File CMP-02 before start of FY
- Cannot opt mid-year
- File GSTR-4 quarterly
- Pay tax quarterly