How to treat this matter

As per proviso 2 to Section 10(1) of the CGST Act, a person who opt to pay tax under clause (a) or clause (b) or clause (c) may supply services , of value not exceeding 10% of turnover in a state or union territory in the preceding financial year or 5 lakh rupees, whichever is higher.

Means a trader or manufacturer under Composition scheme may supply services and pay tax @ 1% upto certain limit. Limit to supply services by trader under composition scheme is higher of following:
(a) 10% of turnover in preceding FY; or
(b) ₹500000

Therefore in your case of we assume your turnover in preceding FY was ₹3500000 so 10% of that would be ₹350000 which lower than ₹500000. So you may supply services upto ₹500000 by paying 1% GST in current FY.

Conclusion: You have to pay 1% of 35lakh+3lakh i.e. ₹38000 GST. And your turnover is less than GST limit so you cannot cancel GST registration because limit of ₹40 lakh is for dealer who is exclusively engaged in supply of goods but in your case you are also supplying service of renting of immovable property so GST turnover limit of ₹20lakh is applicable to you.

For more details or any kind of professional service of GST Consulting you may connect us at:
Email: taxclinictc @ gmail.com
M.No.: 9409161310

1)can i give them bill of rent under Bill of supply
2)impact of this on rent paying party (party is a Pvt Ltd company ),they have to pay gst on rent under RCM or not
3) final conclusion
I can make turnover upto 50 lacks including rental income & business turnover/sale (50-5=45 lks), so I have to pay gst tax of 50000.00 max on my total turnover

1) Yes. You can give them bill of rent under bill of supply.
2) There would not be any impact of this on rent paying party (whether it is corporate or non corporate). They are not required to pay anything under RCM.
3) If your turnover including rental income is ₹50lakh then GST amount that you are required to pay would be ₹50lakh*1%= ₹50000.