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Rule 7 of the CGST Rules, 2017

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GST›CGST Rules, 2017›Chapter II, Composition Levy

At a glance

Entitlement and conditions

  • Table, row 1Eligible manufacturers, excluding manufacturers of notified goods, use half per cent of turnover in the State or Union territory.
  • Table, row 2Eligible suppliers making the supplies in paragraph 6(b) of Schedule II use two and a half per cent of turnover in the State or Union territory.
  • Table, row 3Other suppliers eligible under section 10(1) and (2) use half per cent of turnover of taxable supplies of goods and services in the State or Union territory.
  • Table, row 4Persons ineligible under section 10(1) and (2), but eligible under section 10(2A), use three per cent of turnover of supplies of goods and services in the State or Union territory.

Rule 7 assigns composition rates to eligible categories under section 10. The selected category determines both the rate and the turnover base. Manufacturers and the specified Schedule II suppliers use turnover in the State or Union territory. Other eligible suppliers use the narrower or differently expressed base in their row. Eligibility under section 10 and this Chapter remains necessary.[1]

Text

The text below is the rule as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.[1] The Rules as published in the Gazette of India is the legal source.

Rule 7, verbatim (show)

Rule 7. Rate of tax of the composition levy. -

The category of registered persons, eligible for composition levy under section 10 and the provisions of this Chapter, specified in column (2) of the Table below shall pay tax under section 10 at the rate specified in column (3) of the said Table: -

1[ TABLE Sl. No. Section under which composition levy is opted Category of registered persons Rate of tax

(1) (1A) (2) (3)

1. Sub-sections (1) and (2) of section 10 Manufacturers, other than manufacturers of such goods as may be notified by the Government half per cent. of the turnover in the State or Union territory

2. Sub-sections (1) and (2) of section 10 Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II two and a half per cent. of the turnover in the State or Union territory

3. Sub-sections (1) and (2) of section 10 Any other supplier eligible for composition levy under sub-sections (1) and (2) of section 10 half per cent. of the turnover of taxable supplies of goods and services in the State or Union territory

4. Sub-section (2A) of section 10 Registered persons not eligible under the composition levy under subsections (1) and (2), but eligible to opt to pay tax under sub-section (2A), of section 10 three per cent. of the 2[turnover of] supplies of goods and services in the State or Union territory.

]

1. Substituted (w.e.f. 01.04.2020) vide Notification No. 50/2020-CT dated. 24.06.2020 for Sl. No. Category of registered persons Rate of tax

(1) (2) (3)

1. Manufacturers, other than manufacturers of such goods as may be notified by the Government half per cent. of the turnover in the State or Union territory

2. Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II two and a half per cent. of the turnover in the State or Union territory

3. Any other supplier eligible for composition levy under section 10 and the provisions of this Chapter [half per cent. of the turnover of taxable supplies of [goods and services] in the State or Union territory]

2. Substituted by Corrigendum G.S.R. 412(E), dated 25.06.2020.

Questions to answer on the file

Questions a reviewer answers from the engagement file, grouped by the part of the rule they come from. They describe what the rule asks; they do not decide it.

Manufacturer row identity 7 table row1

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Manufacturer conditional Central Tax amount 7 table row1

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ScheduleII6b supplier row identity 7 table row2

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ScheduleII6b supplier conditional Central Tax amount 7 table row2

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Other eligible10(1)/(2)supplier row identity 7 table row3

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Other eligible10(1)/(2)supplier conditional Central Tax amount 7 table row3

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Section 10(2A)person row identity 7 table row4

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Section 10(2A)person conditional Central Tax amount 7 table row4

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Amendment history

The CBIC text carries 2 footnotes. The table gives each in the source's own terms. Effective dates are as the footnotes state them.[1]

Amendments to Rule 7 as footnoted in the CBIC text
NoteChange
1Substituted (w.e.f. 01.04.2020) vide Notification No. 50/2020-CT dated. 24.06.2020 for Sl. No. Category of registered persons Rate of tax[2]
2Substituted by Corrigendum G.S.R. 412(E), dated 25.06.2020.
Provisions connected to Rule 7
ProvisionConnectionWords that tie them
Section 10 of the CGST Act, 2017this provision requires Section 10 of the CGST Act, 20177 opening "eligible for composition levy under section 10"
Schedule II of the CGST Act, 2017this provision defined by Schedule II of the CGST Act, 20177 table row2 "clause (b) of paragraph 6 of Schedule II"

Circulars and notifications

Circulars and notifications in the CBIC repository that cite this rule, newest first, by number, date and subject. A listing here does not say what an instrument decides; read the instrument.

Notifications (7)

NumberDateSubject
Notification No. 11/2025-Central Tax27 March 2025Seeks to notify Central Goods and Services Tax (Second Amendment) Rules 2025
Notification No. 50/2020-Central Tax24 June 2020Seeks to make seventh amendment (2020) to CGST Rules.
Notification No. 14/2019-Central Tax7 March 2019Seeks to supersede notification No. 08/2017 - Central Tax dated 27.06.2017 in order to extend the limit of threshold of aggregate turnover for availing Composition Scheme u/s 10 of the CGST Act, 2017 to Rs. 1.5 crores. amended by a later instrument
Notification No. 03/2019-Central Tax29 January 2019Seeks to amend the CGST Rules, 2017.
Notification No. 05/2019-Central Tax29 January 2019Seeks to amend notification No. 8/2017-Central Tax dated 27.06.2017 so as to align the rates for Composition Scheme with CGST Rules, 2017.
Notification No. 60/2018-Central Tax30 October 2018Seeks to make amendments (Thirteenth Amendment, 2018) to the CGST Rules, 2017.
Notification No. 03/2018-Central Tax23 January 2018First Amendment 2018, to CGST Rules

See also

References

  1. Central Board of Indirect Taxes and Customs. "Rule 7. Rate of tax of the composition levy". Central Goods and Services Tax Rules, 2017, CBIC tax information portal, with amendment footnotes 1 to 2. Retrieved 17 September 2026.
  2. Notification No. 50/2020-Central Tax, dated 24 June 2020: Seeks to make seventh amendment (2020) to CGST Rules. Cited in CBIC footnote 1.

External links