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GST Composition Scheme Calculator

Assess composition registration eligibility, calculate flat tax splits, and compare savings against regular filings.

Special Category State?

Arunachal, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal

₹

Regular Scheme Estimates (For Comparison)

₹

Eligibility & Comparison Results

Status

Composition Flat Tax (Rate: )

₹0

Regular Scheme Net Tax

₹0

Estimated Tax Savings

₹0

Composition Scheme Constraints:

  • You cannot collect tax from your customers.
  • You cannot claim Input Tax Credit (ITC) on business expenses.
  • You cannot supply goods/services across state borders (Interstate supply is barred).
  • You must file quarterly statement **CMP-08** and annual return **GSTR-4**.
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How to Use This Tool

Simple steps to calculate and verify

  1. 1
    Choose Business Category Select Trader / Manufacturer (1% tax), Restaurant (5% tax), or Service Provider under Section 10(2A) (6% tax).
  2. 2
    Enter Annual Turnover Input total aggregate annual turnover across all business branches under the same PAN.
  3. 3
    Check Eligibility Limits Verify whether turnover is within the statutory limit (₹1.5 Crore for general states; ₹75 Lakh for special states; ₹50 Lakh for service providers).
  4. 4
    Compare Tax Liabilities Compare the flat composition tax against estimated regular scheme tax liabilities to decide the most profitable option.

Pro Tips & Statutory Advice

Practical business & compliance advice

  • No Input Tax Credit (ITC) Composition dealers cannot claim Input Tax Credit on purchases and cannot collect tax from customers via tax invoices.
  • Issue 'Bill of Supply' Only You must issue a 'Bill of Supply' instead of a 'Tax Invoice' with the mandatory endorsement: 'Composition taxable person, not eligible to collect tax'.
  • Strict Interstate Sales Ban Making even a single inter-state supply of goods or selling goods via e-commerce operators immediately disqualifies you from the composition scheme.
  • Quarterly Payment with CMP-08 Composition tax is remitted quarterly using statement CMP-08 by the 18th of the month following the quarter, with annual return GSTR-4.

Online GST Calculator

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AI GST Advisor

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What is the GST Composition Scheme?

The GST Composition Scheme is a simple and easy scheme under GST designed specifically for small taxpayers in India. Eligible small businesses can escape tedious GST formalities and pay GST at a fixed, flat percentage of their local turnover.

This scheme is highly beneficial for businesses with lower profit margins that sell directly to end consumers (B2C) and do not need to pass on Input Tax Credit (ITC) to other businesses.

Composition Scheme Threshold Limits

To be eligible for registration under the GST composition scheme, a taxpayer's aggregate annual turnover must not exceed the following thresholds:

Standard States

Manufacturers / Traders

₹1.5 Crore

Aggregate annual turnover cap in most states across India.

Special Category States

Northeastern & Hill States

₹75 Lakhs

Applies to Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Himachal Pradesh.

Service Providers

Section 10(2A)

₹50 Lakhs

Eligible threshold limit for service suppliers and mixed suppliers.

Composition Rates vs Regular Scheme

Category of Taxpayer Composition Rate Regular Scheme Equivalent
Manufacturers & Traders 1% of turnover (0.5% CGST + 0.5% SGST) Typically 5%, 12%, 18%, or 28% based on goods
Restaurants (Not serving alcohol) 5% of turnover (2.5% CGST + 2.5% SGST) Standard 5% or 18% restaurant service rates
Other Service Providers 6% of turnover (3% CGST + 3% SGST) Typically 18% standard service tax

Important Compliance Rules

While the Composition scheme reduces compliance efforts, registered dealers must adhere to these strict conditions:

  • No Bill of Tax: Composition dealers must issue a "Bill of Supply" instead of a Tax Invoice and cannot show GST separately on the bill.
  • No Tax Collection: You cannot collect GST from your customers. The tax liability must be paid directly from your business turnover pocket.
  • No Input Tax Credit: Any GST you pay on purchases of raw materials, capital machines, or services is non-refundable and cannot be claimed.
  • Interstate Bar: You cannot make interstate sales (selling outside your home state is not allowed). Local supplies only.