Section 10 - Composition levy

Finin2min Summary

Section 10 addresses composition levy. In practical work, use this provision by first fixing the taxable event or procedural step, then connecting the facts to Chapter III and the linked Rules, forms, notifications, circulars and State/UT GST law.

Working Context

This matters for registration eligibility, compulsory triggers, cancellation and composition controls because GST outcomes often turn on timing, portal evidence, State jurisdiction and whether a notification or circular was in force when the event occurred.

Bare Act / Law / Rules / Notifications

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, 1 [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 2 [one crore and fifty lakh rupees], as may be recommended by the Council: 3 [ 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]. 4 [ 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 ...

Workflow / Flow Chart

1. Read the official statutory text of Section 10 with Chapter III and note every proviso or explanation.
2. Pull connected CGST Rules, forms, notifications and circulars for registration eligibility, compulsory triggers, cancellation and composition controls.

Practical Examples

Exam and Advisory Case Studies

Exam case: A question asks whether Section 10 applies to a fact pattern involving registration eligibility, compulsory triggers, cancellation and composition controls. State the section name, identify the trigger words, apply the facts to each condition and conclude with the linked rule/form or remedy.

Q&A

What does Section 10 cover?

Section 10 covers composition levy within Chapter III of the CGST Act.

Can this page replace the official Act?

No. Use this page as a practical guide, then verify Section 10 in India Code, CBIC and any applicable Gazette notification.

What should be retained for Section 10?

Keep the official source, fact matrix, invoices or returns, portal acknowledgements, calculations, correspondence, notices/orders and reviewer conclusion.

Working Checklist

• Linked Rule, notification, circular, form, return and portal step for registration eligibility, compulsory triggers, cancellation and composition controls

Primary Official Sources

• India Code consolidated CGST Act PDFofficial consolidated Act PDF used for statutory cross-check
• CBIC Tax Information Act explorerofficial CBIC section explorer route
• GST Council Central GST resourcesofficial GST Council route for central GST law resources
• CBIC official section content payloadofficial CBIC section HTML payload used for the statutory extract

Related Inter / Intra Links

Section 10 should be read inside the wider GST law hub with CGST Rules, GST forms, circulars, notifications, case-law and practical workflow pages.

Disclaimer

Finin2min provides this Section 10 page for education and professional research. Official India Code, CBIC, Gazette and court sources control the legal position for Composition levy.