Composition levy permits small registered suppliers to pay a prescribed turnover rate instead of standard tax, subject to eligibility.

Composition levy allows a registered person below the turnover threshold to opt to pay tax at prescribed turnover rates instead of regular tax; distinct rates apply by supplier category and the Government may raise the threshold. Ineligible persons include certain service suppliers, those making non-taxable or inter-state supplies, supplies through specified ecommerce operators, and notified manufacturers. The option lapses when turnover exceeds the threshold; the opting person cannot collect tax from recipients or claim input tax credit, and wrongful availing attracts tax determination and penalty provisions.

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