GST कंपोज़िशन स्कीम रजिस्ट्रेशन

The GST Composition Scheme is a simplified compliance scheme under Section 10 of the CGST Act, 2017. Eligible taxpayers with aggregate turnover up to ₹1.5 crore (₹75 lakh in some special category states) pay a flat rate on turnover (1% for manufacturers and traders, 5% for restaurant service, 6% for eligible service providers under Section 10(2A)), pay tax quarterly through Form GST CMP-08 and file one annual return, GSTR-4. The trade-off is that composition dealers cannot claim input tax credit, cannot collect GST from customers, and cannot make inter-State supplies.

The limit is ₹1.5 crore of aggregate turnover in the preceding financial year, in force since 1 April 2019 (Notification No. 14/2019-Central Tax). For Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand the limit is ₹75 lakh. Aggregate turnover is computed on an all-India basis for the same PAN. Service providers opting under Section 10(2A) have a separate limit of ₹50 lakh.

An existing regular taxpayer opts in through GST CMP-02 before the relevant financial year and furnishes ITC-03 under Rule 3(3) and Rule 44. CMP-03 belongs to the provisional-registration migration provision. A new registration applicant selects the composition option in GST REG-01.

Under Rule 7 of the CGST Rules, the composition rates (CGST + SGST/UTGST) are: (1) 1% (0.5% + 0.5%) for manufacturers, (2) 5% (2.5% + 2.5%) for restaurant service, (3) 1% (0.5% + 0.5%) for traders and other eligible suppliers, on their turnover of taxable supplies, and (4) 6% (3% + 3%) for service providers who opt under Section 10(2A) with turnover up to ₹50 lakh (Notification No. 2/2019-Central Tax (Rate)).

No. Composition scheme dealers cannot claim Input Tax Credit on any purchase, including purchases of inputs, capital goods, and input services. This is the fundamental trade-off of the scheme: you pay a flat rate on turnover, but you give up the ability to claim ITC. Before switching, calculate whether your actual ITC savings under regular GST exceed the additional tax you would pay under composition.

Form GST CMP-01 was the intimation used by taxpayers who migrated into GST in 2017 to opt for composition (Rule 3(1)). Today, an existing regular taxpayer opts in with Form GST CMP-02 before the financial year starts, and a new applicant opts in within the registration application, Form GST REG-01.

Form GST CMP-02 is the intimation by a registered person to opt for the composition scheme from the next financial year (Rule 3(3)). To leave the scheme, you file Form GST CMP-04 (Rule 6): before the date of withdrawal for a voluntary exit, or within seven days if you stop meeting a condition, such as crossing the turnover limit.

No. Composition scheme dealers are restricted to intra-state supplies only. If a composition dealer makes an inter-state supply, IGST becomes chargeable at the applicable regular rate. Repeated inter-state supplies while under composition can lead to the scheme being cancelled by the officer. For inter-state trade, you must remain under regular GST.

Partly. Since 1 October 2023 a composition taxpayer may supply goods through an e-commerce operator, but only within the State; the operator must block inter-State sales and collect TCS (Notification No. 36/2023-Central Tax). Supplying services through e-commerce operators is still not allowed under composition.

Restaurant service can opt under Section 10(1) at 5%. Other service providers (IT companies, consultants, agencies and so on) cannot opt under Section 10(1), but can opt under Section 10(2A) at 6% (3% CGST + 3% SGST/UTGST) if their aggregate turnover in the preceding year was up to ₹50 lakh and they make no inter-State supplies (Notification No. 2/2019-Central Tax (Rate)). A Section 10(1) dealer may also supply other services up to 10% of turnover in the State or ₹5 lakh, whichever is higher.

Composition dealers pay tax every quarter through Form GST CMP-08, due by the 18th of the month after the quarter, and file one annual return, GSTR-4, due by 30 June after the financial year (from FY 2024-25; earlier years 30 April). They do NOT file GSTR-1, GSTR-3B or GSTR-9A (Rule 62).

No. An existing taxpayer can opt in only from the start of a financial year, by filing Form GST CMP-02 before it begins (Section 10 and Rule 3). A person who applies for fresh registration during the year can opt in through Form GST REG-01 from the date of registration.

If your aggregate turnover crosses ₹1.5 crore during the financial year, the composition option lapses from that day. You must file Form GST CMP-04 within seven days and pay tax as a regular taxpayer from that day (Section 10(3) and Rule 6(2)).

GSTR-4 is the annual return of a composition taxpayer, filed once after the financial year. It summarises the quarterly CMP-08 payments, outward and inward supplies and tax paid; no CA or CMA certification is needed. GSTR-3B is the monthly (or quarterly under QRMP) summary return of a regular taxpayer, with ITC claims and tax payment.

Yes. Composition scheme dealers must pay tax on reverse charge supplies (such as services from an unregistered supplier, import of services, etc.) at the applicable regular rates, not the composition rates. This is tracked in Table 4 of GSTR-4. The tax on reverse charge is paid separately and is not covered by the flat composition rate on turnover.

GSTR-9A was the annual return for composition taxpayers. It was optional for FY 2017-18 and 2018-19 and does not apply from FY 2019-20 onwards. Composition taxpayers now file GSTR-4 as their annual return, due by 30 June after the financial year from FY 2024-25.

Under Notification No. 73/2017-Central Tax, the late fee for delayed filing of GSTR-4 is ₹50 per day (₹25 CGST + ₹25 SGST), or ₹20 per day (₹10 CGST + ₹10 SGST) where the tax payable in the return is nil. For FY 2021-22 onwards, Notification No. 21/2021-Central Tax caps the CGST late fee at ₹250 where the central tax payable is nil and ₹1,000 in other cases, with an equal SGST amount. The late fee applies from the day after the due date (30th June of the next financial year from FY 2024-25, under rule 62 as amended by Notification No. 12/2024-Central Tax) until the return is filed. A nil GSTR-4 must still be filed.