Business
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GST Composition vs Regular GST
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1–6% flat turnover tax vs full input-output GST filing — which suits your business size and type?
Visual Comparison
Key Differences
| Feature | GST Composition Scheme | Regular GST |
|---|---|---|
| Eligibility | Turnover < ₹1.5 crore | Any turnover |
| Tax rate | 1–6% on turnover (no ITC) | 5–28% on value-add (with ITC) |
| Filing | Quarterly GSTR-4 | Monthly GSTR-1 + GSTR-3B |
| ITC | Cannot claim | Full ITC available |
| Interstate supply | Not allowed | Allowed |
When to Choose Which
Choose GST Composition Scheme
- Small local business < ₹1.5 crore turnover
- Mostly B2C sales
- Low input tax credits available
- Simpler compliance is priority
Choose Regular GST
- Turnover > ₹1.5 crore
- B2B sales where buyers need GST invoice
- High input purchases (ITC offsets tax)
- Interstate sales or e-commerce
Frequently Asked Questions
A simplified GST for small businesses with turnover < ₹1.5 crore. Tax is paid as flat % of turnover without regular GST filing.
Manufacturers: 1%, Traders: 1%, Restaurants: 5%, Other services: 6% of aggregate turnover.
No. They issue Bill of Supply only. Buyers cannot claim ITC on purchases from composition dealers.
No. Inter-state supply is not permitted under composition scheme.
When turnover exceeds ₹1.5 crore, you need to supply interstate, or your buyers need GST invoices for ITC claims.