GST Composition rate for Manufacturer cum Trader

Friends,

What is the gst rate for taxpayer under composition scheme who is both a manufacturer and trader or seller of same goods?

is it 2%?  i am confused whether it is 2% or 1% ... kindly confirm.. 1% cgst and 1% sgst?

Thanks in advance.

 

Replies (6)
Quick Summary
This discussion clarifies the GST composition rate for businesses that act as both manufacturers and traders of the same goods. Initially, there was confusion about whether the rate was 2% or 1%. The consensus, supported by GST notifications, confirms that for manufacturers and traders operating under the composition scheme, the applicable GST rate is 1% of their turnover. This 1% is split equally between CGST and SGST (0.5% each) and applies to all supplies, including exempted ones for manufacturers.

Manufacturers and Traders (Goods)    CGST 0.5%  + SGST 0.5% === Total 1%

thanks for the reply sir. but i came across the below quote as well, so please kindly clarify.

 

"

All businesses and individuals who are registered under the Composition Scheme are required to pay a GST rate of 1% to 6% depending on the type of business activity conducted by the registered person or business entity.

The applicable composition scheme GST rate features equal SGST/UGST and CGST split i.e. 1% GST = 0.5% CGST + 0.5% SGST/UGST, 6% GST = 3% SGST/UGST + 3% CGST. The composition levy rates under GST are as follows:

  • 1% of the turnover for traders and other suppliers eligible for composition scheme registration
  • 2% of the turnover for manufacturers apart from manufacturers of products not eligible for GST composition scheme.
  • 5% of the turnover for restaurant services  
  • 6% of the turnover for businesses providing services/mixed services (other than restaurant services). "

Herewith attached link of last notification by GST department for rates of GST levy...

https://taxinformation.cbic.gov.in/view-pdf/1000585/ENG/Notifications


 

Thank you so much for the clarification sir

You are welcome.                         

As per Rule 7 R/w Notification 50/2020 CT (w.e.f 1/4/20) For Manufacturers & Traders the rate is 1% on Turnover.

Note : 1% need to pay on exempted supply also in case of Manufacturer.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 26 August 2026
Article Assistant

ANIVESH CONSULTANTS LLP

Gurgaon

CA Inter

View Details
Company
ARTICLESHIP 24 August 2026
Chartered Accountant Articles

Rohit KC Jain & Co

New Delhi

CA Inter

View Details
Company
15 September 2026
Client-site CA associate

Aditya Muley and Co

Mumbai

CA

View Details
Company
ARTICLESHIP 26 August 2026
CA Article Assistant/CA Drop Out/Accounts Executive

PARV & Co.

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 16 September 2026
CA Article Trainee

SR BAGAI & Co.

New Delhi

CA Inter

View Details
Company
25 August 2026
Senior Accountant

MG Associates

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 15 September 2026
Freelance Taxation Content Writer Intern

Interactive Media Pvt Ltd.

New Delhi

CA Inter

View Details
Company
16 September 2026
Internal Audit - Team Lead

Consulting & Beyond

Chennai

CA

View Details