Can a service business on Shopify in India use the GST composition scheme?

Which composition option covers a services business?

Section 10(2A) of the CGST Act is open to a registered person "not eligible to opt to pay tax under sub-section (1) and sub-section (2)" whose aggregate turnover in the preceding financial year did not exceed Rs 50 lakh.

If you mainly sell goods, the goods scheme under section 10(1) lets you add services other than restaurant service (Schedule II paragraph 6(b)) worth up to 10% of turnover or Rs 5 lakh, whichever is higher, on preceding-year turnover in your State or Union territory.

Rule 7 of the CGST Rules sets the central tax at 3% of turnover in the State or Union territory, and CBIC's composition flyer, updated November 2022, puts the total at 6%: 3% central plus 3% State or Union territory tax; the rate for each kind of seller has its own page. Under section 10(4) you collect no tax from buyers and claim no input tax credit.

Also excluded: suppliers of non-taxable goods or services, notified manufacturers or suppliers, and casual or non-resident taxable persons.

Does selling services to buyers in other states rule it out?

It can. Section 10(2A)(b) excludes anyone "engaged in making any inter-State outward supplies of goods or services". IGST Act section 12(2) sets the place of supply by the buyer's registration and address on record:

Shopify's India GST help page, read September 25, 2026, mentions neither the composition scheme nor place of supply.

Does selling through a marketplace rule it out?

For services, where the marketplace must collect TCS, yes. Section 10(2A)(c) excludes anyone "engaged in making any supply of services through an electronic commerce operator who is required to collect tax at source under section 52".

Section 137 of the Finance Act 2023 omitted "goods or" from that clause from 1 October 2023, so the bar covers services only.

Whether this bar reaches your own store depends on whether section 52 TCS applies to it, which has its own answer.