🤔 Q1: My turnover is under ₹1.5 crore. Am I automatically eligible for the Composition Scheme?
A: Not necessarily! While low turnover is a key requirement, certain types of businesses are always excluded, regardless of turnover.
🚫 Q2: Which businesses are always excluded from the Composition Scheme?
A: If you’re into manufacturing the following specific goods, you’re not eligible, even with low turnover:
✅ Examples:
• ❌ Ice cream maker (even a local artisanal shop)
• ❌ Pan Masala producer
• ❌ Aerated water bottler
• ❌ Fly ash bricks or blocks manufacturer
• ❌ Tobacco goods trader
📌 Tip: Even if you stopped making these goods this year, but did so last year, you’re still ineligible.
🌍 Q3: Can I opt for the scheme if I sell goods in multiple states?
A: Nope! If you supply goods inter-State, you’re out.
🧾 Example: You run a small textile store in Maharashtra but ship orders to Gujarat—you cannot opt in.
📌 Insight: The scheme is for intra-state dealings only. Think local kirana, not inter-state trader.
Q4: What if I sell only exempted goods—can I still choose the Composition Scheme?
A: No. Businesses that deal only in exempt supplies (like unprocessed farm produce) are not allowed.
📌 Example: If you sell only fresh vegetables, the Composition Scheme isn’t for you.
🛬 Q5: I’m a temporary trader at an expo. Can I opt in?
A: If you’re a Casual Taxable Person or a Non-Resident Taxable Person, then sorry—you’re excluded.
🧾 Real-World Case: You come to India to sell imported leather wallets at a Diwali fair—you’re considered casual and ineligible.
📦 Q6: I sell online through an e-commerce platform. Do I qualify?
A: It depends. If the platform collects TCS under Section 52 (like Amazon, Flipkart), and you supply services, you’re ineligible.
📌 Tip: E-commerce businesses involving service provision via TCS platforms cannot apply.
⏳ Q7: What if I made fly ash bricks last year but stopped now?
A: Still not eligible. If you manufactured any of the restricted goods in the current or preceding year, you’re disqualified.
📌 Example: Even if your factory is now shut, last year’s activity disqualifies you this year.
Q8: Are all food manufacturers excluded?
A: No! Only certain food items are excluded:
• ❌ Ice cream
• ❌ Aerated water
• ❌ Pan Masala
👨🍳 So yes, your home-based pickle business is still eligible! 🥒
💡 Q9: Why so many exclusions?
A: Great question! It’s all about fair taxation. These sectors often:
• Have high profit margins
• Are more complex in supply chains
• Require better tracking and compliance
⚖️ The government wants them under regular GST, not simplified schemes.
🎯 Key Takeaways:
✅ Composition Scheme is for simple, intra-state, small businesses
❌ Manufacturers of specific goods, inter-state traders, exempt suppliers, and e-commerce service sellers via TCS are out
🧾 Always review past year activities too
💬 Still unsure about your eligibility? Connect with us for a personalized review.
📞 CA Bhavesh Panpaliya | +91 8888755557