Composition scheme under the law is for small businesses. This is to bring relief to small businesses so that they need not be burdened with the compliance provisions under the law. Thus, an option has been provided where an asssessee can opt to pay tas on a fixed percentage of turnover. However, following assessee can not opt for the composition scheme.

a) supplier of services (except restaurants)

b) a person engaged in making any supply of goods which are not leviable to tax under this Act;

c) a person engaged in making any inter-State outward supplies of goods;

d) a supplier making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52;

Thus from traders’ point of view, he should be selling the goods within a state.