GST Composition Scheme 2026 — Eligibility, Rates & Benefits
By Parul Singh, GST Practitioner · GST Schemes
Table of Contents
About 40% of my Delhi clients opt for composition scheme. It reduces compliance dramatically, but limits ITC and inter-state sales.
The GST Composition Scheme is a simplified scheme for small taxpayers. It reduces compliance burden but limits ITC claims and inter-state sales.
Eligibility
Businesses with annual turnover up to ₹1.5 crore (₹75 lakh for special category states) can opt for the composition scheme. Service providers with turnover up to ₹50 lakh can also opt under Section 10(2A).
Tax Rates
| Category | Tax Rate |
|---|---|
| Manufacturers & traders | 1% (0.5% CGST + 0.5% SGST) |
| Restaurant services | 5% (2.5% + 2.5%) |
| Service providers | 6% (3% + 3%) |
You cannot sell inter-state or through e-commerce under the composition scheme.