What does section 10 regulate?

It regulates composition levy. Read the exact text, conditions, exceptions and transaction date together.

Which subordinate law should be checked?

Rule 3, Rule 4, Rule 5, Rule 6, Rule 7. Notifications, circulars, forms and the corresponding SGST/UTGST layer may also apply.

What evidence should be retained?

Preserve the contract or transaction record, invoice or form, portal acknowledgement, payment/ledger evidence, correspondence, legal working and the official source version used.

Can portal behaviour override the statute?

No. Portal functionality is operational evidence; legal entitlement and liability remain controlled by the Act, Rules, notifications and binding decisions.

Is this transaction a supply under GST?

Apply section 10 to the exact facts and period, then verify the linked delegated law and official implementation material before concluding.

Who has to pay GST under reverse charge?

Apply section 10 to the exact facts and period, then verify the linked delegated law and official implementation material before concluding.

Can I use the composition scheme for this activity?

Apply section 10 to the exact facts and period, then verify the linked delegated law and official implementation material before concluding.

Is this supply exempt or merely taxed at a special rate?

Fix the transaction date first, then follow the applicable rate/exemption notification chain. GST rates are effective-date driven, not timeless slabs.

Section 10 - Composition levy

Reviewed by CA Nikhil Gupta and Kajri Singh · Last reviewed 30 August 2026

Chapter III - Levy and Collection of Tax

ACTIVE

Official source: The controlling wording and amendment notes are maintained by India Code and CBIC. Open consolidated Act PDF.

Legal status: Section status and chapter placement reviewed against official central sources on 2026-07-28. Historical periods require the law then in force.

Finin2min Summary - Section in 2 Minutes

Offers turnover-based composition schemes with reduced tax and simplified compliance, but no tax collection and no ITC. The general statutory threshold can be raised by notification up to ₹1.5 crore; the notified limit applies subject to State category. Limited services are permitted under the ten-per-cent/₹5 lakh rule for the goods composition scheme. A separate section 10(2A) route applies up to ₹50 lakh for eligible service/mixed suppliers. Inter-State outward supplies and specified disqualifications remain critical. All registrations under the same PAN must opt together.

Provision position

Present in current consolidated Act

CGST chapter

Chapter III — Levy and Collection of Tax

Legal source control

India Code + CBIC official repositories

Law checked

27 July 2026

How to use this page: Application remains transaction-date sensitive: check commencement, amendment history, Rules, notifications and State/UT overlay before reliance. The official consolidated Act controls the statutory wording; the Finin2min layers explain how to apply and evidence it.

Why Section 10 matters

Section 10 (Composition levy) is the section-level control point within Chapter III — Levy and Collection of Tax. This chapter answers the first tax-liability questions: whether a supply is taxable, who pays, and whether composition, exemption, reverse charge or a non-recovery measure changes the result.

Current-law and amendment control

validation 1 — controlling consolidated Act

India Code — Central Goods and Services Tax Act, 2017. Used for the current chapter/section inventory and consolidated provision status.

validation 2 — independent official cross-check

CBIC Tax Information Portal. Use the Act HTML/PDF and amendment history together with current notifications/circulars.

Transaction-date rule: Never treat today’s consolidated wording, a portal screen or an enacted-but-uncommenced amendment as proof of the law that applied on another date. Fix the relevant tax period first.

Official statutory text

The authoritative provision, footnotes and amendment notes are maintained in the official consolidated Act. This analytical page does not re-typeset amendment markers into the running statutory sentence.

Official-source reference reviewed on 2026-07-28. Apply the version and commencement position relevant to the transaction period.

Clause-by-clause / paragraph-wise decode

Section–Rule–Form–Notification–Circular bridge

Rule 3 Rule 4 Rule 5 Rule 6 Rule 7

The mapping is a legal concordance, not a round-robin related-link list. It is limited to instruments listed in this repository.

Practical example

A small trader below the notified limit also earns minor service income. The service amount must fit the statutory tolerance and all PAN-linked registrations must satisfy the scheme. PROFESSIONAL ALERT Crossing the threshold or breaching a condition ends the option from the date of breach, not the next financial year.

Professional alert

Confirm the transaction-date amendment and commencement position before reliance.

Finin2min decision path

Identify the supply and parties.
Classify the supply and determine whether it is within the charging framework.
Identify the person liable and test forward charge, reverse charge, composition or exemption.
Fix the transaction date and applicable notification chain.
Compute and document the liability with classification evidence.

Practical case studies

Case 1 — Section-specific application — A taxpayer encounters an issue involving composition levy. The working paper should identify the exact subsection/proviso, linked Rule/Form/instrument, tax period and evidence before recording the conclusion.

Case 2 — A transaction contains several elements sold for one price. Determine the supply character before applying a GST rate.

Case 3 — A business receives a category of supply that may fall under reverse charge. Liability cannot be concluded from the invoice alone; test the charging notification and recipient conditions.

Accounting, ERP & portal touchpoints

Tax codes should separate supply classification, forward/reverse charge, exemption and composition status rather than relying on one generic GST rate field.

Control: keep the legal conclusion separate from system configuration; document every tax-code/master change and its effective date.

Notice, litigation & evidence risk

Classification and charge errors usually flow into rate, invoice, return, interest and ITC consequences. Preserve contracts, product/service descriptions and notification versions.

Evidence hierarchy: source transaction → books/ERP → statutory return/form → portal acknowledgement → legal working → correspondence/order.

Judicial position — how to read precedent

Start with binding Supreme Court authority, then the jurisdictional High Court, other High Courts and GSTAT where applicable. AAR/AAAR rulings are fact- and jurisdiction-sensitive and should not be presented as universal law. Always check whether a decision has been stayed, reviewed, distinguished or overtaken by amendment.

Open the Finin2min provision citator · Open the connected GST case-law module

Common mistakes to avoid

Looking up the rate before deciding what the supply is.
Confusing exemption with zero-rating or non-taxable treatment.
Applying reverse charge because a vendor did not charge GST.
Using a notification without checking its effective date and conditions.

Questions professionals actually ask

Is this transaction a supply under GST?: Apply section 10 to the exact facts and period, then verify the linked delegated law and official implementation material before concluding.
Who has to pay GST under reverse charge?: Apply section 10 to the exact facts and period, then verify the linked delegated law and official implementation material before concluding.
Can I use the composition scheme for this activity?: Apply section 10 to the exact facts and period, then verify the linked delegated law and official implementation material before concluding.
Is this supply exempt or merely taxed at a special rate?: Fix the transaction date first, then follow the applicable rate/exemption notification chain. GST rates are effective-date driven, not timeless slabs.

Related law and practical resources

Chapter III guide Practical GST pathways CGST Rules GST Forms Notifications Circulars Provision citator Case law GST Portal controls State/UT overlays

Finin2min takeaway: Section 10 should never be applied alone. Read the exact provision, the connected Rules/forms/instruments, the transaction date, the State/UT overlay and the binding judicial position together.

Implementation checklist

Fix the transaction, taxable period and jurisdiction.
Read every subsection, proviso, explanation and omission marker.
Open the mapped Rule, form, notification and circular.
Test State/UT variation and portal version.
Preserve evidence, approvals, working papers and acknowledgements.
Record the conclusion, assumptions, source date and reviewer.

Evidence and retention checklist

Contract, purchase order, invoice or underlying transaction document.
Registration, return, ledger, challan and portal acknowledgement.
Official Act/Rule/notification version used and effective date.
Internal tax position paper, computation and management approval.
Correspondence, notices, replies, orders and appeal papers where applicable.

Practical Q&A

What does section 10 regulate?: It regulates composition levy. Read the exact text, conditions, exceptions and transaction date together.
Which subordinate law should be checked?: Rule 3, Rule 4, Rule 5, Rule 6, Rule 7. Notifications, circulars, forms and the corresponding SGST/UTGST layer may also apply.
What evidence should be retained?: Preserve the contract or transaction record, invoice or form, portal acknowledgement, payment/ledger evidence, correspondence, legal working and the official source version used.
Can portal behaviour override the statute?: No. Portal functionality is operational evidence; legal entitlement and liability remain controlled by the Act, Rules, notifications and binding decisions.

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