Section 10, Central Goods and Services Tax Act, 2017 [S10-698]
As at 7 September 2026. In force from 22 June 2017 by Notification No. 1/2017-Central Tax, dated 19-6-2017 [N10-02Z].
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 percent of the turnover in State or turnover in Union territory in case of a manufacturer,
(b) two and a half percent 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 percent 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 notification, increase the said limit of fifty lakh rupees to such higher amount, not exceeding one crore and fifty lakh rupees, as may be recommended by the Council:
Provided further that a person who opts to pay tax under clause (a) or clause (b) or clause (c) may supply services (other than those referred to in clause (b) of paragraph 6 of Schedule II), of value not exceeding ten per cent. of turnover in a State or Union territory in the preceding financial year or five lakh rupees, whichever is higher.
Explanation.- For the purposes of second proviso, the value of exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount shall not be taken into account for determining the value of turnover in a State or Union territory.
(2) The registered person shall be eligible to opt under sub-section (1), if :-
(a) save as provided in sub-section (1), he is not engaged in the supply of services;
(b) he is not engaged in making any supply of **** services which are not leviable to tax under this Act;
(c) he is not engaged in making any inter-State outward supplies of goods or services;
(d) he is not engaged in making any supply of goods or services through an electronic commerce operator who is required to collect tax at source under section 52; ****
(e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council ;and
(f) he is neither a casual taxable person nor a non-resident taxable person:
Provided that where more than one registered persons are having the same Permanent Account Number [issued under the Income-tax Act, 1961(43 of 1961)], the registered person shall not be eligible to opt for the scheme under sub-section (1) unless all such registered persons opt to pay tax under that sub-section.
(2A) 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, not eligible to opt to pay tax under sub-section (1) and sub-section (2), 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 three per cent. of the turnover in State or turnover in Union territory, if he is not-
(a) engaged in making any supply of goods or services which are not leviable to tax under this Act;
(b) engaged in making any inter-State outward supplies of goods or services;
(c) engaged in making any supply of **** services through an electronic commerce operator who is required to collect tax at source under section 52;
(d) a manufacturer of such goods or supplier of such services as may be notified by the Government on the recommendations of the Council; and
(e) a casual taxable person or a non-resident taxable person:
Provided that where more than one registered person are having the same Permanent Account Number issued under the Income-tax Act, 1961 (43 of 1961), the registered person shall not be eligible to opt for the scheme under this sub-section unless all such registered persons opt to pay tax under this sub-section.
(3) The option availed of by a registered person under sub-section (1) or subsection (2A), as the case may be, shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds the limit specified under sub-section (1) or sub-section (2A), as the case may be.
(4) A taxable person to whom the provisions of sub-section (1) or, as the case may be, sub-section (2A) apply shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax.
(5) If the proper officer has reasons to believe that a taxable person has paid tax under sub-section (1) or sub-section (2A), as the case may be, despite not being eligible, such person shall, in addition to any tax that may be payable by him under any other provisions of this Act, be liable to a penalty and the provisions of section 73 or section 74 or section 74A shall, mutatis mutandis , apply for determination of tax and penalty.
Explanation 1 .- For the purposes of computing aggregate turnover of a person for determining his eligibility to pay tax under this section, the expression "aggregate turnover " shall include the value of supplies made by such person from the 1st day of April of a financial year up to the date when he becomes liable for registration under this Act, but shall not include the value of exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.
Explanation 2 .- For the purposes of determining the tax payable by a person under this section, the expression " turnover in State or turnover in Union territory " shall not include the value of following supplies, namely:-
(i) supplies from the first day of April of a financial year up to the date when such person becomes liable for registration under this Act; and
(ii) exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.
Defined terms in this text (23)
act: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (2) "act", used with reference to an offence or a civil wrong, shall include a series of acts, and words which refer to acts done extend also to illegal omissions;
act: 363 more definitions.
aggregate turnover: Section 2(6), Central Goods and Services Tax Act, 2017: "aggregate turnover" means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;
consideration: Section 2(31), Central Goods and Services Tax Act, 2017: "consideration" in relation to the supply of goods or services or both includes- (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply;
electronic commerce operator: Section 2(45), Central Goods and Services Tax Act, 2017: "electronic commerce operator" means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce;
financial year: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (21) "financial year" shall mean the year commencing on the first day of April; (22) a thing shall be deemed to be done in "good faith" where it is in fact done honesty, whether it is done negligently or not;
financial year: 22 more definitions.
goods: Section 2, Central Goods and Services Tax Act, 2017 [S1061R] (In this Act, unless the context otherwise requires): "goods" means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply
goods: 38 more definitions.
Government: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (23) "Government" or the Government shall include both the Central Government and any State Government;
income: Section 2(24), IT Act 1961: "income" includes- (i) profits and gains; (ii) dividend; (iia) voluntary contributions received by a trust created wholly or partly for charitable or religious purposes [...]; (iii) the value of any perquisite or profit in lieu of salary taxable under clause (2) [...] of section 17; (iiia) any special allowance or benefit [...]; (iiib) any allowance granted to the assessee either to meet his personal expenses [...]; (iv) the value of any benefit or perquisite, whether convertible into money or not [...]; (v) any sum chargeable to income-tax under clauses (ii) and (iii) of section 28 or section 41 or section 59; (va) to (ve) any sum chargeable to income-tax under clauses (iiia) to (v) of section 28; (vi) any capital gains chargeable under section 45; (vii) the profits and gains of any business of insurance carried on by a mutual insurance company or by a co-operative society [...]; (viia) the profits and gains of any business of banking (including providing credit facilities) carried on by a co-operative society with its members; (ix) any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever [...]; (x) any sum received by the assessee from his employees as contributions to any provident fund or superannuation fund [...]; (xi) any sum received under a Keyman insurance policy [...]; (xii) any sum referred to in clause (va) of section 28; (xiia) the fair market value of inventory referred to in clause (via) of section 28; (xiii) to (xviib) any sum or property referred to in the specified clauses of sub-section (2) of section 56; (xviii) assistance in the form of a subsidy or grant or cash incentive or duty drawback or waiver or concession or reimbursement (by whatever name called) by the Central Government or a State Government or any authority or body or agency in cash or kind to the assessee [...];
person: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): "person" shall include any company or association or body of individuals, whether incorporated or not
person: 1 more definition.
recipient: Section 2(93), Central Goods and Services Tax Act, 2017: "recipient" of supply of goods or services or both, means— (a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration; (b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and (c) where no consideration is payable for the supply of a service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied;
registered: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (49) "registered", used with reference to a document, shall mean registered in India under the law for the time being in force for the registration of documents;
registered person: Section 2(94), Central Goods and Services Tax Act, 2017: "registered person" means a person who is registered under section 25 but does not include a person having a Unique Identity Number;
resident: Section 2(96), Income-tax Act, 2025: "resident" means a person who is resident in India as per section 6;
Schedule: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (52) "Schedule" shall mean a Schedule to the Act or Regulation in which the word occurs;
section: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (54) "section" shall mean a section of the Act or Regulation in which the word occurs;
section: 363 more definitions.
State: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (58) "State"(a)as respects any period before the commencement of the Constitution (Seventh Amendment) Act, 1956, shall mean a Part A State, a Part B State or a Part C State; and(b)as respects any period after such commencement, shall mean a State specified in the First Schedule to the Constitution and shall include a Union territory;](59)State Act shall mean an Act passed by the Legislature of a State established or continued by the Constitution;
sub-section: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (61) "sub-section" shall mean a sub-section of the section in which the word occurs;
supplier: Section 2(105), Central Goods and Services Tax Act, 2017: "supplier" in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied; Provided that a person who organises or arranges, directly or indirectly, supply of specified actionable claims, including a person who owns, operates or manages digital or electronic platform for such supply, shall be deemed to be a supplier of such actionable claims, whether such actionable claims are supplied by him or through him and whether consideration in money or money's worth, including virtual digital assets, for supply of such actionable claims is paid or conveyed to him or through him or placed at his disposal in any manner, and all the provisions of this Act shall apply to such supplier of specified actionable claims, as if he is the supplier liable to pay the tax in relation to the supply of such actionable claims.
supply: Section 7(1), Central Goods and Services Tax Act, 2017: "For the purposes of this Act, the expression - "supply" includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. Explanation.-For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another; (b) import of services for a consideration whether or not in the course or furtherance of business; and (c) the activities specified in Schedule I, made or agreed to be made without a consideration."
taxable person: Section 2(107), Central Goods and Services Tax Act, 2017: "taxable person" means a person who is registered or liable to be registered under section 22 or section 24;
turnover in State: Section 2(112), Central Goods and Services Tax Act, 2017: "turnover in State" or "turnover in Union territory" means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and inter-State supplies of goods or services or both made from the State or Union territory by the said taxable person but excludes central tax, State tax, Union territory tax, integrated tax and cess;
value: Section 2(41), Customs Act, 1962: "value", in relation to any goods, means the value thereof determined in accordance with the provisions of sub-section (1) or sub-section (2) of section 14;
year: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): "year" shall mean a year reckoned according to the British calendar
Made under this section, or naming it (30)
Notification No. 8/2017 - Central Tax [N10-0D1], 27 June 2017, superseded. Recital: "In exercise of the powers conferred under the proviso to sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby prescribes [...]"
Notification No. 1/2018 - Central Tax [N10-8TF], 1 January 2018, in force. Recital: "In exercise of the powers conferred by sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) the Central Government, on the recommendations of the Council, hereby makes the following further amendments [...]"
Notification No. 04/2022-Central Tax [N10-WJ5], 31 March 2022, in force. Recital: "In exercise of the powers conferred under the proviso to sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council"
Notification No. 05/2019-Central Tax [N10-FBM], 29 January 2019, in force. Recital: "In exercise of the powers conferred by sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council"
Notification No. 14/2019-Central Tax [N10-FRQ], 7 March 2019, in force. Recital: "In exercise of the powers conferred under the proviso to sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act),and in supersession of the notification no 8/2017- Central Tax, dated the 27th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 647 (E), dated the 27th June, 2017, except as things done or omitted to be done before such supersession, the Central Government, on the recommendations of the Council"
Notification No. 16/2022-Central Tax [N10-X5A], 13 July 2022, in force. Recital: "In exercise of the powers conferred under the proviso to sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council"
Notification No. 43/2019-Central Tax [N10-K8D], 30 September 2019, in force. Recital: "In exercise of the powers conferred under the proviso to the sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council"
Notification No. 46/2017-Central Tax [N10-6TJ], 13 October 2017, in force. Recital: "In exercise of the powers conferred by sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) the Central Government, on the recommendations of the Council"
Notification No. 1/2018-Union Territory Tax [N10-8VD], 1 January 2018, in force. Recital: "In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act) read with section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, on the recommendations of the Council"
Notification No. 2/2017-Union Territory Tax [N10-0BD], 27 June 2017, in force. Recital: "In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act) read with section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, on the recommendations of the Council"
Notification No. 02/2022-Union Territory Tax [N10-WFT], 31 March 2022, in force. Recital: "In exercise of the powers conferred under the sub-section (1) and sub- section(2) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017), read with section 21 of the Union Territory Goods and Services Tax Act, 2017(14 of 2017), the Central Government, on the recommendations of the Council"
Notification No. 04/2022-Union Territory Tax [N10-XCR], 13 July 2022, in force. Recital: "In exercise of the powers conferred under the sub-section (1) and sub-section (2) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017), read with section 21 of the Union Territory Goods and Services Tax Act, 2017(14 of 2017), the Central Government, on the recommendations of the Council"
Notification No. 16/2017-Union Territory Tax [N10-5SR], 13 October 2017, in force. Recital: "In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act) read with section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, on the recommendations of the Council"
Circular No. 170/02/2022-GST [C10-5VE], 6 July 2022, in force. The text contains "section 10 of the Central Goods and Services Tax Act, 2017".
Circular No. 77/51/2018-GST [C10-2P8], 31 December 2018, in force. The text contains "section 10 of the Central Goods and Services Tax Act, 2017".
Circular No. 97/16/2019-GST [C10-3BK], 5 April 2019, in force. The text contains "section 10 of the Central Goods and Services Tax Act, 2017".
Notification No. 20/2019-Central Tax [N10-GPR], 23 April 2019, in force. The text contains "section 10 of the Central Goods and Services Tax Act, 2017".
Notification No. 21/2019-Central Tax [N10-GQT], 23 April 2019, in force. The text contains "section 10 of the said Act".
Notification No. 36/2023-Central Tax [N11-0V0], 4 August 2023, in force. The text contains "section 10 of the said Act".
Notification No. 40/2017-Central Tax [N10-6ME], 13 October 2017, in force. The text contains "section 10 of the said Act".
Notification No. 50/2023-Central Tax [N11-1F9], 29 September 2023, in force. The text contains "section 10 of the said Act".
Notification No. 65/2018-Central Tax [N10-DTV], 29 November 2018, in force. The text contains "section 10 of the said Act".
Notification No. 66/2017-Central Tax [N10-8GV], 15 November 2017, in force. The text contains "section 10 of the said Act".
Notification No. 2/2019-Central Tax (Rate) [N10-FSN], 7 March 2019, in force. The text contains "section 10 of the said Act".
Notification No. 9/2019-Central Tax (Rate) [N10-GGM], 29 March 2019, in force. The text contains "section 10 of the said Act".
Cited by (20)
Section 122, Central Goods and Services Tax Act, 2017 [S10-A39], 12 April 2017, Band A. "section 10".
Section 140, Central Goods and Services Tax Act, 2017 [S10-ART], 12 April 2017, Band A. "section 10".
Section 17, Central Goods and Services Tax Act, 2017 [S10-6HX], 12 April 2017, Band A. "section 10".
Section 18, Central Goods and Services Tax Act, 2017 [S10-6JV], 12 April 2017, Band A. "section 10".
Section 29, Central Goods and Services Tax Act, 2017 [S10-6X5], 12 April 2017, Band A. "section 10".
Section 31, Central Goods and Services Tax Act, 2017 [S10-6Z1], 12 April 2017, Band A. "section 10".
Section 37, Central Goods and Services Tax Act, 2017 [S10-76J], 12 April 2017, Band A. "section 10".
Section 39, Central Goods and Services Tax Act, 2017 [S10-78E], 12 April 2017, Band A. "section 10".
Rule 11, Central Goods and Services Tax Rules, 2017 [S10-D5S], 19 June 2017, Band A. "section 10".
Rule 138E, Central Goods and Services Tax Rules, 2017 [S10-JEW], 19 June 2017, Band A. "section 10".
Rule 3, Central Goods and Services Tax Rules, 2017 [S10-CT6], 19 June 2017, Band A. "section 10".
Rule 4, Central Goods and Services Tax Rules, 2017 [S10-CV4], 19 June 2017, Band A. "section 10".
Rule 5, Central Goods and Services Tax Rules, 2017 [S10-CWA], 19 June 2017, Band A. "section 10".
Rule 56, Central Goods and Services Tax Rules, 2017 [S10-F0V], 19 June 2017, Band A. "section 10".
Rule 6, Central Goods and Services Tax Rules, 2017 [S10-CX8], 19 June 2017, Band A. "section 10".
Rule 61, Central Goods and Services Tax Rules, 2017 [S10-F5H], 19 June 2017, Band A. "section 10".
Rule 62, Central Goods and Services Tax Rules, 2017 [S10-F7N], 19 June 2017, Band A. "section 10".
Rule 7, Central Goods and Services Tax Rules, 2017 [S10-CYE], 19 June 2017, Band A. "section 10".
Rule 80, Central Goods and Services Tax Rules, 2017 [S10-FTA], 19 June 2017, Band A. "section 10".
Rule 85, Central Goods and Services Tax Rules, 2017 [S10-G1A], 19 June 2017, Band A. "section 10".
Not held (0)
none
Duties published under this section (0)
none