Section 10 of CGST Act, 2017 – Section 10: Composition Levy

The Central Goods and Services Tax Act, 2017

CHAPTER III: LEVY AND COLLECTION OF TAX

Section 10: Composition Levy

(1) Notwithstanding anything to the contrary contained in this Act but subject to the provisions of sub-sections 3 and 4 of section 9, a registered person, whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in lieu of the tax payable by him under sub-section 1 of section 9, an amount of tax calculated at such rate as may be prescribed, but not exceeding, -

(a) one per cent. of the turnover in State or turnover in Union territory in case of a manufacturer,
(b) two and a half per cent. of the turnover in State or turnover in Union territory in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II, and
(c) half per cent. of the turnover in State or turnover in Union territory in case of other suppliers, subject to such conditions and restrictions as may be prescribed:

Provided that the Government may, by notificati

Simplified Act

(1) Even if other parts of this law say something different, a business that registered for GST and made less than 50 lakh rupees in the year before can choose to pay a fixed rate of tax instead of the normal GST rates. This rate will be set by the government and won't be more than:

(a) 1% for manufacturers,
(b) 2.5% for certain service providers, and
(c) 0.5% fo

Explanation using examples

Imagine a small manufacturer, Mr. A, who runs a furniture business in his home state. In the preceding financial year, his aggregate turnover was ₹40 lakh,

Section 10 of CGST Act, 2017 : Section 10: Composition Levy

Bare Act

Simplified Act

Explanation using examples

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