Finance/Compliance Consultant
78024 Points
Posted on 16 November 2026
Adding to the replies above, the limits are correct but the 6% rate applies only to service providers, not to traders.
1. Turnover limit (aggregate turnover of the preceding financial year):
• Goods suppliers, manufacturers and restaurants: Rs 1.5 crore.
• Rs 75 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand (Himachal Pradesh, Assam and J&K have the Rs 1.5 crore limit).
• Service providers (or mixed suppliers) opting under Section 10(2A): Rs 50 lakh.
2. Composition tax rates:
• Manufacturers and traders: 1% (0.5% CGST + 0.5% SGST).
• Restaurant services (no alcohol): 5%.
• Service providers under Section 10(2A): 6% (3% + 3%).
3. Key conditions:
• No inter-state outward supply and no input tax credit. Goods may be sold through e-commerce operators (allowed from 1 October 2023, subject to conditions), but services through e-commerce operators are not allowed.
• Not available to manufacturers of notified goods such as ice cream, pan masala and tobacco.
• Option is taken in CMP-02 before the start of the financial year; returns are CMP-08 (quarterly) and GSTR-4 (annual).
Overall Summary: Limit is Rs 1.5 crore (Rs 75 lakh in specified states) for goods and Rs 50 lakh for services; tax is 1% for traders/manufacturers, 5% for restaurants and 6% only for service providers.