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Under section 10, Central Goods and Services Tax Act, 2017 (13)

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Open at its own address /S10-698

Section 10, Central Goods and Services Tax Act, 2017 [S10-698]

As at 8 September 2026. In force from 22 June 2017 by Notification No. 1/2017-Central Tax, dated 19-6-2017 [N10-02Z].

In Central Goods and Services Tax Act, 2017 [A10-25N]. This text from 1 November 2024, by The Finance (No. 2) Act, 2024. Other texts (5): from 22 June 2017 to 31 January 2019; from 1 February 2019 to 31 December 2019; from 1 January 2020 to 31 December 2020; from 1 January 2021 to 30 September 2023; from 1 October 2023 to 31 October 2024.

Cite: Section 10, Central Goods and Services Tax Act, 2017 [S10-698]. Machine: S10-698.

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;

(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.

Definitions recorded in this document

Read the recorded scope with each definition. A matching word alone does not establish applicability.

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

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".

5 more.

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".

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