# Marginal Supply of Services — Eligibility under Composition u/s 10(1) & 10(2)
## The Concept
Manufacturers, traders and restaurant service providers (who fall under Section 10(1)) are otherwise not allowed to supply other services. However, the Second Proviso to Section 10(1) carves out a marginal exception — a small amount of services (other than restaurant services) can be supplied without losing the composition benefit.
## The Marginal Limit Formula
The value of marginal supply of services (other than restaurant services — i.e., other than supplies referred to in clause (b) of para 6 of Schedule II, and excluding alcoholic liquor for human consumption) must NOT exceed:
> Higher of:
> - 10% of turnover in a State/UT in the preceding financial year, OR
> - ₹5 lakh
## Who can use this proviso?
- Manufacturers (under 10(1))
- Traders (under 10(1))
- Restaurant service providers (under 10(1))
In other words, all composition dealers under 10(1) get this marginal-service relief, irrespective of whether they're a manufacturer, trader, or restaurant.
## Important — "Other than restaurant services"
The proviso talks about supply of services other than restaurant services. Restaurant service is itself principal supply for that category and is allowed without limit.