Can a Composition Dealer Sell Outside the State?
GSTZone Desk · Updated 2026
Short answer
No. A composition dealer is restricted to intra-state (within the same state) outward supply of goods only — inter-state sales are simply not permitted under the scheme.
In detail
Section 10(2)(c) of the CGST Act makes this an explicit condition of being in composition, not just a practical limitation — a composition taxpayer who makes even one inter-state outward supply becomes ineligible for the scheme, not just liable for extra tax on that one transaction.
The restriction exists partly because composition’s flat-rate, no-ITC simplicity doesn’t fit cleanly into the cross-state IGST credit-chain mechanism that GST relies on for inter-state trade.
This is exactly why a business planning to sell pan-India — including through marketplaces that fulfil orders across state lines — generally cannot combine that ambition with composition, and needs to weigh the simplified compliance of composition against the growth limitation it locks in.
GSTZone tip
If you’re currently in composition and planning to expand beyond your home state, plan the transition to regular GST registration ahead of your first inter-state sale — making that sale while still technically in composition puts your entire scheme eligibility at risk, not just that one transaction.
Related questions
Can a composition dealer receive goods from another state?+
Yes — the restriction is on OUTWARD inter-state supply; a composition dealer can still purchase inputs and goods from suppliers in other states.
What about inter-state supply of services under composition?+
The services composition scheme has its own specific conditions; broadly, the intent of composition across both variants is to keep the taxpayer’s outward supply chain simple and intra-state.
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