GST Composition Scheme Turnover Limits 2025: What You Need to Know

The GST composition scheme offers small Indian businesses a simpler, low-tax alternative to regular GST registration. But there's a catch — you must stay within the annual turnover threshold. Exceed it, and you lose eligibility immediately.

Current Turnover Thresholds for 2025

The limits vary depending on your business type:

For manufacturers and goods traders:

• ₹40 lakh annual turnover ceiling

For service providers:

• ₹20 lakh annual turnover ceiling

For special-category states (Jammu & Kashmir, Himachal Pradesh, Uttarakhand, and North-Eastern states):

• ₹10 lakh annual turnover ceiling

If your turnover crosses these limits in any financial year, you must immediately shift to regular GST registration — there's no grace period.

Why These Limits Matter

The composition scheme is designed for micro and small businesses. The lower thresholds for services (₹20 lakh) and special states (₹10 lakh) reflect higher GST compliance needs in these segments.

• Track your turnover carefully throughout the financial year
• Plan ahead if you're nearing the limit — switching schemes mid-year is complex
• Turnover includes all business income, not just taxable supplies

What Happens When You Exceed the Limit?

Once you breach the ceiling:

• You must file an amended return and switch to regular GST
• You become liable to pay the difference in tax from the date you exceeded the limit
• Late switching can attract penalties and interest

Many Indian small business owners don't realize they've crossed the threshold until GST audit time — a costly mistake.

Stay compliant and avoid surprises. Use our free GST calculator at gsthelp.in to monitor your turnover against the composition scheme limits and get real-time compliance alerts today.