Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Turnover limits
Goods: up to ₹1.5 crore (₹75 lakh special states). Services: up to ₹50 lakh. Confirm current limits.
Who can't opt
Inter-state suppliers, e-commerce sellers, manufacturers of certain notified goods, and casual/non-resident taxpayers.
The service sub-scheme and the fine print
There are two tracks. The goods composition scheme covers traders, manufacturers and restaurants with aggregate turnover up to ₹1.5 crore (₹75 lakh in the listed special-category states). A separate scheme under notification lets small service providers — or mixed suppliers of goods and services — opt in up to ₹50 lakh aggregate turnover, paying 6%. Eligibility is tested on the previous year’s turnover and applies PAN-wide, so if one registration on your PAN is ineligible, all are. You can’t opt if you make inter-state outward supplies, supply through an e-commerce operator collecting TCS, are a casual or non-resident taxable person, or deal in goods outside the scheme. A composition dealer can still buy inter-state and pay reverse charge (at normal rates, without credit). You opt in by filing CMP-02 before the year begins, or at registration, and opt out with CMP-04 (or automatically on crossing the limit), after which you file ITC-01 to claim credit on stock held. Because the limits and the special-category list change, and because one ineligible activity disqualifies the whole PAN, confirm both your turnover and your supply pattern against the current rules before and during the year.