Eligible small service providers can use the 6% composition-style scheme when preceding-year turnover does not exceed ₹50 lakh, subject to conditions.
Eligible small service providers can use the 6% composition-style scheme when preceding-year turnover does not exceed ₹50 lakh, subject to conditions. They cannot collect tax separately or claim input tax credit.
The scheme is distinct from ordinary composition for traders/restaurants and from income-tax presumptive taxation. Interstate/other eligibility restrictions and quarterly payment/annual return rules must be checked.
Confirm turnover and eligibility; compare 6% on turnover with regular GST after ITC; account for no tax collection and no ITC; file the prescribed option timely.
A consultant with ₹35 lakh receipts and ₹3 lakh eligible input GST may find regular registration cheaper than 6% composition, depending on customer pricing and ITC.
The example is an illustration, not a substitute for the taxpayer's facts. A change in status, period, payment mode, document, city, asset, relationship or scheme can change the result.
Search pages often state a rate or limit without identifying the governing base. The calculation must distinguish gross receipt from taxable profit, tax from TDS, a deduction from an exemption, salary from business income, and an accounting entry from the tax treatment.
| Decision point | Required treatment |
|---|---|
| Legal year | Use the Act, rules and notification effective for the income or transaction period |
| Taxpayer category | Confirm residence, age, entity, employee/business status and regime |
| Calculation base | Use the statutory definition rather than CTC, net bank receipt or accounting label |
| Ceiling or rate | Apply actual-amount, percentage, shared, lifetime and gross-income limits in sequence |
| Documentation | Link every input to an invoice, statement, contract, certificate or official record |
| Final output | Show tax, surcharge, cess, interest and TDS/TCS credits separately |
This page is written around the entities and concepts search engines expect for the topic: GST, export of services, LUT, composition scheme, input tax credit. They are used only where relevant and are connected to the live calculator and knowledge hub rather than repeated mechanically.
For the complete rules on this topic, see the core guide: Home Office Deduction in India: Employee vs Freelancer Rules.
See the broader GST & Indirect Tax knowledge hub for related rules and calculators on this topic.
Eligible small service providers can use the 6% composition-style scheme when preceding-year turnover does not exceed ₹50 lakh, subject to conditions. They cannot collect tax separately or claim input tax credit.
Finin2min rule: establish eligibility, calculate transparently, and preserve an audit trail.
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.