# Rates of Tax under Composition Levy
## (i) Composition Scheme for GOODS — Section 10(1) read with Rule 7
| S.No. | Category of Registered Person | Rate of Tax | Base |
|---|---|---|---|
| 1 | Manufacturers (other than manufacturers of notified goods — ice cream, pan masala, tobacco, aerated waters, fly ash bricks/aggregate/blocks, bricks of fossil meals or siliceous earths, building bricks, earthen/roofing tiles) | 0.5% CGST + 0.5% SGST = 1% | Turnover in State/UT |
| 2 | Restaurant service suppliers [clause (b) of para 6 of Schedule II — non-alcoholic] | 2.5% CGST + 2.5% SGST = 5% | Turnover in State/UT |
| 3 | Traders / any other supplier eligible u/s 10 | 0.5% CGST + 0.5% SGST = 1% | Turnover of taxable supplies of goods & services in State/UT |
### Critical Distinction — Category 3 (Traders)
For traders only, the tax is computed on turnover of taxable supplies (not total turnover). This means:
- Exempt supplies → no tax (excluded from base)
- Only taxable supplies in State/UT → tax @ 1%
## (ii) Composition Scheme for SERVICES — Section 10(2A)
- Rate: 3% CGST + 3% SGST/UTGST = 6% of turnover of supplies of goods & services in State/UT.
## Eligibility Note
> Aggregate turnover of preceding FY decides eligibility, but tax is paid on "turnover" (or "turnover of taxable supplies" for traders) of the State/UT in the current year.
## Memory Aid — Rate Summary
```
Manufacturer (non-notified) → 1% (on total State/UT turnover)
Trader → 1% (on TAXABLE supplies in State/UT)
Restaurant (non-alcoholic) → 5% (on total State/UT turnover)
Services [u/s 10(2A)] → 6% (on total State/UT turnover)
```