GST Composition Scheme · Panaji, Goa
Advisory on the GST Composition Scheme for goods traders and manufacturers — eligibility, CMP-02 election, 1% composition levy, GSTR-4 annual return, and CMP-08 quarterly statement by qualified CAs in Goa.
Overview
The GST Composition Scheme under Section 10 of the CGST Act allows eligible registered taxpayers to pay GST at a lower flat rate on their aggregate turnover instead of the standard rate — eliminating the need for complex invoice-level GSTR-1 filing and monthly GSTR-3B. For traders and manufacturers of goods with turnover up to ₹1.5 crore (₹75 lakh for specified special category states), composition is typically the simplest and most cost-effective compliance route.
Composition taxpayers pay 1% (for traders), 2% (for manufacturers), or 5% (for restaurant businesses) on total turnover — but cannot charge GST on invoices, cannot claim input tax credit, and cannot make inter-state supplies. The decision to opt in or out of composition requires careful analysis. Our GST registration services include composition scheme election filing.
What we cover
From eligibility check to GSTR-4 filing — complete composition scheme advisory and compliance.
Talk to our CA →Reviewing turnover, supply types, and business operations against the composition eligibility criteria — turnover cap, exclusion of inter-state supplies, non-applicability to service providers (except restaurant services), and mixed supply restrictions.
Filing the composition scheme election (Form CMP-02) on the GST portal at the start of the financial year or at the time of new registration. The election is filed electronically and takes effect from the beginning of the tax period.
Advising on the applicable composition rate: 1% (0.5% CGST + 0.5% SGST) for traders; 2% (1% CGST + 1% SGST) for manufacturers; 5% (2.5% CGST + 2.5% SGST) for restaurant businesses. Rates apply to aggregate turnover including exempt supplies.
Preparing and filing the quarterly statement in Form CMP-08 — a self-assessed tax payment statement filed by 18th of the month following each quarter — the composition taxpayer's equivalent of GSTR-3B.
Preparing and filing the annual composition return in Form GSTR-4 by 30 April of the following financial year — consolidating all outward supplies and tax paid for the year.
Advising on when to exit composition — typically when turnover approaches the threshold, when inter-state sales become necessary, or when ITC value exceeds composition levy — and managing the transition back to regular GST with GSTR-1/3B filing.
Composition rates at a glance
Composition scheme available for goods traders and manufacturers with aggregate turnover up to ₹1.5 crore per year (₹75 lakh for specified states).
Traders pay 1% composition levy (0.5% CGST + 0.5% SGST) on total turnover — no ITC claim, no GST on invoice.
Manufacturers pay 2% composition levy on total turnover. Tobacco, ice cream, and pan masala manufacturers are excluded from composition.
One annual return (GSTR-4) by 30 April + quarterly CMP-08 tax payment — dramatically simpler than regular taxpayer returns.
Frequently asked questions
Eligible registered persons with aggregate turnover up to ₹1.5 crore (₹75 lakh for Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Arunachal Pradesh, Sikkim, and Uttarakhand) who supply only within their state. Excluded from composition: suppliers of services other than restaurant services; inter-state suppliers; suppliers of tobacco, ice cream, or pan masala; e-commerce operators; and non-resident taxable persons.
A composition taxpayer cannot: charge GST separately on invoices (the tax is borne as a cost); collect GST from customers; claim input tax credit on purchases; make inter-state outward supplies; supply non-taxable goods or services (other than exempt goods); or manufacture notified goods (ice cream, pan masala, tobacco). Violation of any condition triggers automatic exit from the scheme and regular GST liability for the entire year.
CMP-08 is a quarterly self-assessed tax payment statement filed by 18th of the month after each quarter (October, January, April, July). It declares total outward supplies and the tax payable for the quarter. GSTR-4 is the annual return filed once a year by 30 April — consolidating all outward supplies, purchases (with inward supply details from suppliers), and tax paid via CMP-08 for the entire financial year.
No. A composition taxpayer must issue a 'Bill of Supply' instead of a tax invoice. The Bill of Supply must carry the words 'Composition taxable person, not eligible to collect tax on supplies' at the top. Since no GST is charged on the Bill of Supply, the purchaser cannot claim ITC on purchases from a composition supplier. This is a key commercial consideration when deciding whether composition is appropriate.
If aggregate turnover exceeds the composition threshold during the financial year, the taxpayer becomes ineligible for the scheme from the date of exceeding the limit. They must file Form GST CMP-04 to withdraw from the scheme, convert to a regular taxpayer, and start filing GSTR-1 and GSTR-3B. Tax for the period of ineligibility must be paid at regular rates along with applicable interest — not at the composition rate.
The QRMP (Quarterly Return Monthly Payment) scheme is a different simplification for regular GST taxpayers with turnover up to ₹5 crore — allowing quarterly GSTR-1 and GSTR-3B filing with monthly tax payment. It is distinct from the Composition Scheme. Composition taxpayers who exit the scheme can opt for QRMP if their turnover is within ₹5 crore, providing a simpler alternative to monthly regular returns.
Related services
The composition decision affects your pricing, ITC, and compliance burden for the entire year. Our qualified CAs in Panaji, Goa will analyse your situation and handle the election and all filings.