GST Composition Scheme Tax
Calculate GST tax payable under the Composition Scheme for traders, manufacturers, and restaurants. Compare composition tax vs regular GST to see which is better for your business.
GST Composition Scheme Tax Calculator
Tax payable under composition vs regular GST — which suits your business?
Total annual sales (must be below Rs 1.5 crore for composition)
The GST rate you would charge under regular registration
Annual purchases on which you would claim ITC under regular scheme
Composition scheme available for turnover up to Rs 1.5 crore. Cannot issue tax invoices or claim ITC under composition.
The Composition Scheme charges GST on turnover — not on profit margin. A trader with Rs 80 lakh turnover pays just Rs 80,000 (0.1% CGST + 0.1% SGST = 0.5% total) vs potentially Rs 7–14 lakh under regular GST. But the catch: you cannot issue a tax invoice or collect GST from customers, and you cannot claim ITC.
GST Composition Scheme — Is It Right for Your Business?
The GST Composition Scheme is a simplified tax option for small businesses with annual turnover up to Rs 1.5 crore. Instead of charging GST on each sale and claiming ITC on purchases, composition dealers pay a flat tax on their total turnover — 1% for traders and manufacturers, 5% for restaurants. The scheme dramatically reduces compliance burden but comes with trade-offs.
Key limitations of the composition scheme
Composition dealers cannot collect GST from customers (they bear the tax themselves), cannot issue a GST tax invoice (only a Bill of Supply), cannot make inter-state supplies, and cannot claim Input Tax Credit. For B2B businesses where buyers expect to claim ITC, composition status can be a commercial disadvantage. For predominantly B2C businesses with low margins and high turnover — like kirana stores — it can save significant tax and compliance costs.