> ⚠️ Note: Special category states for Registration threshold (10/20 lakh) are different from these 8 special states for Composition (75 lakh).
Worked example
### Example 1
Example: Mr. X had aggregate turnover of ₹1.2 crore in FY 2024-25 in Maharashtra. He is eligible to opt for composition scheme for goods in FY 2025-26 (since ₹1.2 cr < ₹1.5 cr).
### Example 2
Example: Mr. Y (Manipur) had turnover of ₹70 lakh in preceding FY. He is eligible for composition scheme since ₹70 lakh < ₹75 lakh (the special-category limit).
### Example 3
Example: Mr. Z (service provider in Karnataka) opted for composition u/s 10(2A) at start of FY. His turnover crosses ₹50 lakh on 5th October. His composition option lapses w.e.f. 5th October, and from that day he must pay tax at normal rates.
⚠️ Common exam mistakes
Mixing up the 8 special category states for composition with the special states for registration threshold (10/20 lakh). They are different lists.
Applying ₹50 lakh threshold to goods scheme — that is the services scheme limit.
Treating the threshold as a current-year computation — it is based on preceding FY's aggregate turnover for eligibility.
Forgetting that the option lapses immediately on crossing the limit during the year (not at year-end).
Bare-Act text Section 10(1), 10(2A) & 10(3) · CGST Act, 2017 · click to expand
Section 10(1): Notwithstanding anything to the contrary contained in this Act but subject to the provisions of sub-sections (3) and (4) of section 9, a registered person, whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in lieu of the tax payable by him under sub-section (1) of section 9, an amount of tax calculated at such rate as may be prescribed... Provided that the Government may, by notification, increase the said limit of fifty lakh rupees to such higher amount, not exceeding one crore and fifty lakh rupees, as may be recommended by the Council.
Section 10(3): The option availed of by a registered person under sub-section (1) shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds the limit specified under sub-section (1).