Composition Scheme in Pathanamthitta
A simpler, lower-rate GST option for small taxpayers. Pay a flat 1%–6% of turnover, file just one quarterly challan (CMP-08) and one annual return (GSTR-4). Our experts confirm your eligibility and handle the CMP-02 opt-in end-to-end.
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Composition Scheme in Pathanamthitta
RoC Ernakulam — Company Law Bhavan, BMC Road, Thrikkakara P.O., Ernakulam – 682021
Kerala High Court
32 (Kerala)
Kerala levies Professional Tax (max ₹2,400/year), payable half-yearly to the local municipality/panchayat.
Sabarimala Pilgrimage Economy, Rubber & Agri, Remittance
Pathanamthitta is a central-Travancore pilgrimage (Sabarimala), rubber, and remittance district.
What Is Composition Scheme?
A quick, plain-language explanation before the details.
The Composition Scheme lets a small business pay GST at a low flat rate on turnover, file only quarterly, and skip the paperwork of input tax credit — in exchange for not collecting GST from customers.
Under Section 10 of the CGST Act, 2017, an eligible registered person whose aggregate turnover in the preceding financial year did not exceed the prescribed limit may opt to pay tax at the composition rate in lieu of the regular tax under Section 9.
Administered by the Goods and Services Tax Network (GSTN) under the Central Board of Indirect Taxes and Customs (CBIC), via the portal gst.gov.in.
The option, once exercised, applies for the whole financial year and continues year to year until you withdraw (Form CMP-04) or your turnover crosses the limit and the scheme lapses automatically.
Quick Facts
Who Can Opt for the Composition Scheme?
The scheme is optional and available only to small taxpayers within the turnover limits below. Choosing it fixes your tax rate, return frequency and input-credit position for the year.
| Category of taxpayer | Aggregate turnover limit | Composition rate |
|---|---|---|
| Traders & manufacturers — most states | ₹1.5 crore | 1% (0.5% CGST + 0.5% SGST) |
| Traders & manufacturers — special-category states | ₹75 lakh | 1% |
| Restaurants / caterers (no alcohol) | ₹1.5 crore | 5% (2.5% + 2.5%) |
| Eligible service providers / mixed suppliers | ₹50 lakh | 6% (3% + 3%) |
Special-category states for the ₹75 lakh limit: Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand. The ₹50 lakh service-provider option is under Notification 2/2019-CT(R).
No input tax credit
A composition taxpayer cannot claim input tax credit on purchases. The flat rate is paid out of your own pocket, not collected from customers.
Bill of Supply, not tax invoice
You cannot charge GST separately on the invoice. Instead you issue a Bill of Supply and print “composition taxable person, not eligible to collect tax on supplies”.
Signboard declaration
You must display the words “composition taxable person” on the signboard at every place of business and on every Bill of Supply.
No inter-state outward supply
A composition dealer cannot make inter-state outward supplies of goods and cannot supply through an e-commerce operator that collects TCS.
Included in aggregate turnover
- All taxable supplies
- Exempt supplies
- Exports and zero-rated supplies
- Inter-state supplies
- All supplies under the same PAN, across India
Excluded from aggregate turnover
- CGST, SGST, IGST and cess
- Value of inward supplies under reverse charge
- Non-taxable supplies (e.g. alcohol for human consumption)
Is This Service Right for You?
Ideal for
- Small traders and shopkeepers with turnover up to ₹1.5 crore
- Small manufacturers wanting a low, predictable tax rate
- Restaurants and caterers not serving alcohol
- Local businesses selling mostly within their own state (B2C)
- Small service providers within the ₹50 lakh limit
- Businesses wanting minimal filing — quarterly, not monthly
You may need this if
- Your aggregate turnover is (and will stay) within the composition limit
- You sell mostly to end consumers who don't need input credit
- You supply only within your own state
- You want a flat 1%/5%/6% rate instead of standard GST rates
- You prefer a Bill of Supply and simpler quarterly compliance
- You do not sell through Amazon, Flipkart or other TCS marketplaces
Not sure if you need this?
Talk to an Expert →Composition Rates by Type of Business
The flat rate depends on what you supply. Our experts confirm the correct category and rate so you neither over-pay nor fall out of the scheme.
Traders & Manufacturers
Traders and manufacturers of goods pay 1% of turnover in the state — split 0.5% CGST + 0.5% SGST.
Restaurants (No Alcohol)
Restaurants and caterers not serving alcohol pay 5% of turnover (2.5% CGST + 2.5% SGST).
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Service ProvidersServices / mixed supply up to ₹50 lakh — 6%
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Special-Category States₹75 lakh goods limit (NE & hill states)
| Business type | Composition rate | Turnover limit | Return |
|---|---|---|---|
| Traders / manufacturers | 1% (0.5% + 0.5%) | ₹1.5 cr (₹75 L special) | CMP-08 + GSTR-4 |
| Restaurants (no alcohol) | 5% (2.5% + 2.5%) | ₹1.5 cr | CMP-08 + GSTR-4 |
| Service providers / mixed | 6% (3% + 3%) | ₹50 lakh | CMP-08 + GSTR-4 |
Rates are on turnover in the state/UT. The 6% service-provider option is under Notification 2/2019-CT(R). Composition taxpayers do not claim input tax credit.
Why Choose the GST Composition Scheme?
For the right small business, composition means less tax, less paperwork and steadier cash flow. Here is what you gain — and what you give up.
-
01
Lower, Flat Tax Rate
Pay just 1% (traders/manufacturers), 5% (restaurants) or 6% (services) of turnover instead of the standard 5%–18% GST rates — a big saving for low-margin, high-volume small businesses.
-
02
Simpler, Quarterly Filing
Instead of monthly GSTR-1 and GSTR-3B, you file one quarterly payment challan (CMP-08) and a single annual return (GSTR-4) — far less compliance effort.
-
03
Predictable Cash Flow
A flat rate on turnover makes your tax outgo easy to forecast, which helps a small business plan pricing and working capital.
-
04
Minimal Record-Keeping
No input-tax-credit reconciliation (GSTR-2B) to maintain. You issue a simple Bill of Supply rather than a full tax invoice with tax breakup.
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05
The Trade-Off: No ITC
You cannot claim input tax credit on purchases and cannot charge GST to customers. For B2B sellers whose buyers want credit, regular registration may suit better.
-
06
Right Fit Confirmed
Composition is not for everyone. Our experts compare your margins, buyers and supply pattern before you opt in — so you choose the scheme that actually saves you money.
Simple, Transparent Pricing
Custom quote for your case
Fees depend on your business type and scope. Get a clear, itemised quote upfront — no hidden professional charges, government fee billed at actuals.
Who Can Apply?
Eligibility checklist
- Aggregate turnover in the preceding year within ₹1.5 crore (₹75 lakh special-category states) for goods, or ₹50 lakh for services
- You supply only within your own state — no inter-state outward supply of goods
- You do not supply through an e-commerce operator that collects TCS
- You do not supply goods that are non-taxable under GST (e.g. alcohol for human consumption)
- You are not a casual taxable person or a non-resident taxable person
- You are not a manufacturer of goods notified as ineligible (e.g. ice cream, pan masala, tobacco, aerated water)
- All GSTINs on the same PAN opt for composition together
Everything You Need. One Professional Team.
Eligibility Assessment
Check your turnover, buyers and supply pattern to confirm composition is the right — and cheaper — choice for you.
Rate & Category Fixing
Determine whether you fall under 1%, 5% or 6% and confirm the correct HSN/SAC classification.
Opt-in Filing
File CMP-02 (existing taxpayer) or select composition in REG-01 (new registration) on the portal.
ITC Reversal (ITC-03)
Where you switch from regular to composition, file Form ITC-03 to reverse credit on stock as required.
Invoice & Signboard Setup
Set up your Bill of Supply format and the mandatory composition declaration on bills and signboard.
Quarterly CMP-08
Compute and file the quarterly self-assessed tax payment challan (CMP-08) on time.
Annual GSTR-4
Prepare and file the annual composition return (GSTR-4) accurately.
Withdrawal / Monitoring
Track turnover and, if you cross the limit or choose to exit, file CMP-04 and transition you to regular GST smoothly.
What You’ll Receive
Documents Required for Composition Registration
For a fresh registration the documents mirror a regular GST application. To opt in as an existing taxpayer, only Form CMP-02 (and ITC-03 for stock credit) is filed on the portal — no fresh documents needed.
Proprietorship
Single owner · simplest setup- PAN & Aadhaar of proprietor
- Passport-size photograph
- Business address proof — rent agreement + NOC, or property-tax receipt
- Bank statement / cancelled cheque / passbook
Partnership / LLP
Two or more partners- Partnership deed or LLP agreement
- PAN of all partners; Aadhaar & photo of signatory
- Registered-office address proof (+ NOC)
- Bank statement / cancelled cheque
Private Ltd / OPC
Registered company · DSC needed- Certificate of Incorporation, MOA & AOA
- Company PAN; PAN & Aadhaar of directors
- Board resolution + DSC of signatory (mandatory)
- Registered-office proof (+ NOC) & bank proof
Existing taxpayer? File CMP-02
If you already hold a regular GSTIN, opting into composition is done entirely on the portal by filing Form CMP-02 before the start of the financial year — no fresh document upload.
Reverse credit on stock (ITC-03)
When switching from regular to composition you must reverse input tax credit on inputs in stock, semi-finished and finished goods via Form ITC-03 within the prescribed period.
DSC mandatory for companies
Private Ltd, OPC and LLP applications must be signed with a Class-3 Digital Signature Certificate. Proprietors and partnerships can e-sign via Aadhaar OTP (EVC).
Address proof must be recent
The utility bill or property-tax receipt used as address proof should be dated within the last 2–3 months. Rented premises need a rent agreement plus the owner's NOC.
Opt in before the year begins
An existing taxpayer must file CMP-02 before the start of the financial year for which composition is to apply; the option then runs for the whole year.
Don’t have all the documents?
We’ll identify what your case needs →How to Register / Opt into the Composition Scheme
The entire process happens on the official portal at gst.gov.in.
Confirm eligibility
We verify your turnover, supply type and buyers to confirm you qualify — and that composition is genuinely cheaper for you than regular GST.
Choose your route
New business: select Composition while filing New Registration (REG-01). Existing regular taxpayer: opt in through Form CMP-02 on the portal.
File the opt-in (CMP-02 / REG-01)
Complete the application or CMP-02, sign with DSC / EVC / Aadhaar OTP, and submit on gst.gov.in.
Reverse credit on stock (ITC-03)
If switching from regular to composition, file Form ITC-03 to reverse input tax credit on stock within the prescribed period.
Set up Bill of Supply & signboard
Configure your Bill of Supply format and add the mandatory “composition taxable person” declaration on bills and at your premises.
File quarterly & annually
Pay self-assessed tax each quarter via CMP-08 (by the 18th after quarter-end) and file the annual return GSTR-4 (by 30 June following the year).
Composition Scheme — Key Timelines
| Stage | Expected Time |
|---|---|
| Existing taxpayer opting in (Form CMP-02) | Before the start of the financial year |
| ITC reversal on stock (Form ITC-03) | Within 60 days of the year in which composition begins |
| New registration selecting composition (REG-01) | Processed like a regular application (~3–7 working days) |
| Withdrawal from the scheme (Form CMP-04) | Within 7 days of becoming ineligible / on voluntary exit |
CMP-08 (quarterly tax payment) is due by the 18th of the month following each quarter; the annual return GSTR-4 is due by 30 June following the financial year. If turnover crosses the limit, the option lapses from that day and you must file CMP-04 within 7 days.
Key Dates — At a Glance
| Frequency | What Is Due |
|---|---|
| Quarterly | CMP-08 — self-assessed tax payment by the 18th after quarter-end · Compute tax at your flat composition rate · Retain purchase & sales summaries |
| Annually | GSTR-4 — annual return by 30 June following the year · Reconcile turnover against the composition limit · Confirm continued eligibility for the next year |
| On Every Bill | Issue a Bill of Supply (not a tax invoice) · Do not charge GST separately · Print the composition-taxable-person declaration |
| Event-Based | Display “composition taxable person” on the signboard · File CMP-04 within 7 days if you cross the limit / exit · Reverse stock credit via ITC-03 when leaving the scheme |
Dates are indicative and may change with government notifications. Our team tracks every deadline so you never miss a filing.
Doing It Yourself vs TaxClue
Doing It Yourself
- Work out whether composition is actually cheaper for your margins
- Confirm you are not in an ineligible category (ice cream, pan masala, tobacco, etc.)
- File CMP-02 / REG-01 correctly and on time
- Compute and file Form ITC-03 stock-credit reversal
- Set up a compliant Bill of Supply and signboard declaration
- Track CMP-08 and GSTR-4 due dates yourself
- Spot when turnover crosses the limit and exit in time
With TaxClue
- Expert compares composition vs regular for your case
- Ineligible-category check done for you
- CMP-02 / REG-01 prepared and filed accurately
- ITC-03 reversal computed and filed
- Bill of Supply & signboard set up correctly
- Quarterly CMP-08 & annual GSTR-4 handled
- Turnover monitored — timely CMP-04 exit if needed
Skip the guesswork.
Let an expert handle it →Common Mistakes That Delay Your Application
TaxClue reviews your documents before filing to reduce avoidable errors.
What Happens If Your Application Is Rejected?
- Turnover in the preceding year exceeded the limit
- Business falls in an ineligible / notified category
- Inter-state outward supplies or e-commerce (TCS) supplies detected
- Details inconsistent with PAN / existing GST records
If an opt-in is rejected or you are found ineligible, we assess the reason, correct the position and — where composition genuinely doesn't fit — set you up correctly under regular GST instead.
Compliance for a Composition Taxpayer
Quarterly
- CMP-08 — self-assessed tax payment by the 18th after quarter-end
- Compute tax at your flat composition rate
- Retain purchase & sales summaries
Annually
- GSTR-4 — annual return by 30 June following the year
- Reconcile turnover against the composition limit
- Confirm continued eligibility for the next year
On Every Bill
- Issue a Bill of Supply (not a tax invoice)
- Do not charge GST separately
- Print the composition-taxable-person declaration
Event-Based
- Display “composition taxable person” on the signboard
- File CMP-04 within 7 days if you cross the limit / exit
- Reverse stock credit via ITC-03 when leaving the scheme
Penalties & Consequences
Opting in when ineligible — or continuing after crossing the limit — exposes you to demand of the full regular tax plus penalty. Correct compliance keeps you protected.
What is at stake if you do not comply
- Cannot claim input tax credit or charge GST on invoices under the scheme
- Crossing the ₹1.5 crore (₹75 lakh special-category) limit forces an immediate exit to regular GST
- Wrongly opting in when ineligible triggers demand for full regular tax plus penalty
- Missing the CMP-02 opt-in window keeps you on regular GST for the year
- Interest at 18% p.a. on tax not paid on time via CMP-08
| Situation | Consequence |
|---|---|
| Wrongly availed the scheme / turnover crossed the limit | Officer may demand tax at regular rates plus a penalty (Section 10(5) read with Section 73/74) |
| Failure to file CMP-08 / GSTR-4 on time | Late fee and interest; portal may block further filing |
| Collected GST despite being a composition dealer | Tax collected is recoverable with penalty; scheme benefit may be denied |
Our experts track your turnover through the year and flag the moment you approach the ₹1.5 crore / ₹75 lakh / ₹50 lakh limit so you can withdraw in time.
Regulatory Updates 2025–26
- 2025: Composition taxpayers file CMP-08 quarterly and GSTR-4 annually; the scheme covers goods turnover up to ₹1.5 crore.
- 2025: Biometric Aadhaar authentication at GST Suvidha Kendras has been rolled out across most states for new registrations.
Why Businesses Choose TaxClue
Right-Fit Advice
We tell you honestly whether composition or regular GST saves you more.
Eligibility Verified
Every ineligibility trigger is checked before you opt in.
Transparent Fees
A clear, itemised quote upfront — no surprises.
Deadlines Tracked
CMP-08 and GSTR-4 due dates managed for you.
Turnover Watch
We flag the moment you approach the composition limit.
Smooth Transitions
Seamless exit to regular GST if and when you outgrow the scheme.
Your Documents Deserve Professional Care
- Documents handled by professionals under confidentiality
- Access limited to the team working on your file
- Communication over secure digital channels
- Documents retained only as long as needed for compliance
Frequently Asked Questions
What is the GST Composition Scheme?
What is the turnover limit for the Composition Scheme?
What are the composition tax rates?
Can a composition dealer claim input tax credit?
How does an existing taxpayer opt into the scheme?
Which businesses cannot opt for the Composition Scheme?
What returns does a composition taxpayer file?
Can a restaurant use the Composition Scheme?
How do I withdraw from the Composition Scheme?
Do composition taxpayers pay tax under reverse charge?
Is the government fee for composition registration free?
What is the turnover limit for the composition scheme in special-category states?
Can a composition dealer make inter-state sales?
What is the difference between the composition scheme and the QRMP scheme?
Can a composition taxpayer issue a tax invoice?
What is Form CMP-08 and when is it due?
Official Sources & Legal References
Every figure on this page — rates, turnover limits, forms and timelines — is drawn from primary law and official government sources. Verify them directly:
- GST Portal — Opt for Composition (CMP-02)File CMP-02, CMP-08 and GSTR-4 and manage your composition option
- CGST Act, 2017 — Section 10Composition levy — eligibility, rate and conditions · India Code
- CBIC-GST — Notification 2/2019-CT(R)6% composition option for eligible service providers up to ₹50 lakh
- GST Portal — Composition FAQs & ManualsOfficial guidance on opting in, CMP-08 and GSTR-4
Related Guides
QRMP scheme for small taxpayers
Read guide ArticleGST registration: process, documents & limits
Read guide ArticleCGST Sections 22–30: registration explained
Read guide ArticleGST return filing: types & due dates
Read guide ArticleGST rate chart 2025-26 (full list)
Read guide ArticleHSN & SAC codes under GST
Read guide ArticleGST invoice format & rules
Read guide ArticleGST penalties & prosecution (s.122–138)
Read guideComposition Scheme Resources — All Free
Opt into the Composition Scheme the Right Way
Expert-managed composition registration — eligibility check, CMP-02 opt-in, ITC-03 reversal and quarterly CMP-08 / annual GSTR-4 filing. Free consultation, zero hidden charges.