GST Composition Scheme for Goods 1% turnover tax, quarterly compliance.
Composition scheme registration under Section 10 of the CGST Act for traders, manufacturers, and small dealers with turnover up to Rs 1.5 crore — covering eligibility advisory, Form CMP-02 opt-in, Form CMP-08 quarterly returns, GSTR-4 annual returns, and scheme migration.
The GST composition scheme for goods is a simplified tax regime under Section 10 of the CGST Act designed for small traders and manufacturers. Instead of charging full GST on each invoice and filing monthly returns, a composition dealer pays a flat rate of 1% on aggregate turnover (0.5% CGST + 0.5% SGST) and files a quarterly statement in Form CMP-08, plus an annual return in Form GSTR-4. The scheme drastically reduces compliance burden for small businesses with turnover up to Rs 1.5 crore (Rs 75 lakh in special category states).
The composition scheme suits B2C retailers, neighbourhood traders, small manufacturers, and goods suppliers whose buyers do not need input tax credit. It is not suited for B2B businesses, since a composition dealer cannot issue a tax invoice, cannot collect GST from customers, cannot claim input tax credit on purchases, and cannot make inter-state outward supplies. Manufacturers of ice cream, pan masala, tobacco, and aerated waters, as well as casual taxable persons and non-resident taxable persons, are excluded from the scheme.
Our GST composition scheme services include eligibility evaluation, opt-in filing through Form GST CMP-02 at the start of the financial year, scheme migration from regular GST (Form CMP-02) and out of composition (Form CMP-04), input tax credit reversal on stock as per Form ITC-03, quarterly CMP-08 tax payment, annual GSTR-4 return filing, and exit planning when turnover crosses the threshold. We also advise on bill of supply formats, mandatory display of the composition status, and the consequences of crossing the limit mid-year.
Our Composition Scheme Services
Eligibility Assessment
Turnover analysis, exclusion check (ice cream, tobacco, pan masala, aerated waters), and scheme suitability review.
Form CMP-02 Opt-In
Intimation in Form GST CMP-02 to opt for the composition scheme at the start of the financial year.
Form ITC-03 Filing
Reversal of input tax credit on stock held on the date of opting into the composition scheme.
Quarterly CMP-08 Filing
Quarterly statement of tax payment under composition scheme — due 18th of the month following the quarter end.
Annual GSTR-4 Return
Annual composition return in Form GSTR-4 with outward supply, inward supply, and tax summary — due 30 April.
Bill of Supply Setup
Bill of supply format with mandatory composition taxable person declaration and price-without-GST messaging.
Scheme Exit & Form CMP-04
Filing of CMP-04 when turnover crosses Rs 1.5 crore or where the dealer chooses to exit, with ITC-01 input tax credit claim on stock.
Composition Advisory
Continuing advisory on aggregate turnover monitoring, mixed supply implications, and inter-state purchase compliance.
Composition Scheme Workflow
Suitability Check
Review of business model, customer profile (B2B vs B2C), and turnover trajectory.
Opt-In Filing
CMP-02 intimation and ITC-03 reversal of input tax credit on stock as on the cut-off date.
Invoice Setup
Bill of supply template, composition declaration, and POS system update for tax-inclusive pricing.
Quarterly Tax Payment
Aggregate turnover computation, 1% tax calculation, and CMP-08 filing every quarter.
Annual Return
Form GSTR-4 annual return preparation and filing along with reconciliation of CMP-08 statements.
Why Choose Composition Scheme
Frequently Asked Questions
Traders, manufacturers, and small dealers with aggregate turnover up to Rs 1.5 crore in the preceding financial year (Rs 75 lakh for special category states) can opt for the GST composition scheme. Manufacturers of ice cream, pan masala, tobacco, and aerated waters are excluded.
1% of turnover for traders (0.5% CGST + 0.5% SGST), and 1% of turnover for manufacturers (0.5% CGST + 0.5% SGST). For restaurants not serving alcohol, the rate is 5% (2.5% CGST + 2.5% SGST).
No. A composition dealer cannot claim input tax credit on purchases, cannot collect GST from customers, and cannot issue a tax invoice — only a bill of supply with the words composition taxable person on it.
No. Composition dealers cannot make inter-state outward supplies. Inter-state purchases are however permitted. Any inter-state sale results in compulsory exit from the composition scheme.
Form CMP-08 quarterly statement for tax payment (due 18th of the month following the quarter) and Form GSTR-4 annual return (due 30 April following the financial year).
Considering Composition Scheme?
Get a clear, side-by-side comparison of regular GST vs composition scheme for your business — including tax outflow, ITC impact, and compliance cost — before you opt in.
Opt for Composition Scheme or call +91 9819 000 511