Updated 10 November 2026. A plain-language guide, not tax advice. Confirm with your CA and the advisory on the GST portal.
Short answer: GSTN has updated the composition levy functionality on the GST portal with effect from 1 November 2026. There is now a separate category, "Person eligible for composition levy under Section 10(2A)", for small service providers and mixed suppliers. On forms REG-01, CMP-02, CMP-04 and REG-14 you pick either Option A (the existing goods-based categories, more than one allowed) or Option B (Section 10(2A) only), never both. You can now change your category through a REG-14 amendment.
What changed on the portal
As reported by A2Z Taxcorp, StudyCafe and Taxscan, the advisory makes these changes:
| Option | Categories | Selection |
|---|---|---|
| Option A | Manufacturers (other than notified goods); suppliers of food and drink under paragraph 6(b) of Schedule II (restaurants); any other supplier eligible under Section 10(1) | One or more |
| Option B | Person eligible under Section 10(2A) | Only this one |
- The choice appears in REG-01 (new registration), CMP-02 (opting in), CMP-04 (opting out) and REG-14 (amendment).
- Option A and Option B are mutually exclusive.
- Composition taxpayers can update their category through REG-14 if it was recorded wrongly or their business has changed.
- The category must be correct across all GSTINs under the same PAN.
Section 10(1) vs Section 10(2A): the basics
These are long-standing rules, summarised from guides such as Busy. Check current limits before you opt in.
| Point | Section 10(1) (Option A) | Section 10(2A) (Option B) |
|---|---|---|
| Who | Manufacturers, traders, restaurants | Service providers and mixed suppliers not eligible under 10(1) |
| Turnover limit (previous year) | ₹1.5 crore (₹75 lakh in specified special category states) | ₹50 lakh |
| Tax rate | 1% for manufacturers and traders, 5% for restaurants | 6% (3% CGST + 3% SGST) |
Both share the same restrictions: no input tax credit, no GST shown on the bill (you issue a bill of supply saying you are a composition taxable person), no inter-state outward supplies, and the scheme applies to all GSTINs under the PAN together.
Who should check their category now
- Small service businesses such as consultants, repair shops, salons, tuition centres or agencies with turnover up to ₹50 lakh who are already in composition. Make sure the portal shows Section 10(2A), not a goods category.
- Businesses whose model changed, for example a trader that now mainly provides services. A REG-14 amendment may be needed.
- Multi-state businesses with several GSTINs on one PAN. Every GSTIN must show the same correct category.
- New applicants filling REG-01 who want composition from the start.
Step-by-step checklist
- Log in to the GST portal and check the composition category in your registration details.
- Compare it with what you actually do: goods-based (Option A) or service/mixed under Section 10(2A) (Option B).
- Check your previous year's turnover across all GSTINs on the PAN against the ₹1.5 crore or ₹50 lakh limit.
- If the category is wrong, file a REG-14 amendment, and repeat for every GSTIN on the PAN.
- Update your billing software so the bill of supply carries the composition declaration and the right rate is used for CMP-08.
- Keep paying tax through quarterly CMP-08 and file the annual GSTR-4. Busy lists 18 January 2027 for the October to December 2026 quarter and 30 June 2027 for the FY 2026-27 GSTR-4.
- If you plan to opt in from next year, CMP-02 is filed before the financial year starts (by 31 March 2027 for FY 2027-28).
- If you cross the limit, composition ends from that date. File CMP-04 within 7 days and move to regular invoicing.
The registration form itself also changed from 1 November 2026. Our post on GST registration, amendment and cancellation rules covers that, and the November 2026 compliance calendar lists this month's due dates.
Billing software for composition dealers
A composition dealer needs simpler invoices but tighter turnover tracking, because crossing the limit changes everything overnight. A good system prints a proper bill of supply, tracks turnover across GSTINs, warns you near the limit and switches to tax invoices when you move to the regular scheme. See our GST billing software checklist or book a free call with Nextinera to discuss a billing setup for your business.