GST Composition Scheme Calculator (2026)

Check your eligibility and calculate exact GST payable under the Composition Scheme (1%, 5%, or 6%). Instantly know your tax burden compared to regular GST.

Rules | Formula | FAQs

Business Details

Special: Arunachal, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal.

Eligibility & Tax Output

Status

Checking...

Tax Insights

  • ✅ Return Filing: Quarterly statement (CMP-08) and Annual return (GSTR-4).
  • 🚫 ITC Blocked: You cannot claim Input Tax Credit on your purchases.

Calculation Rule

GST Payable = (Turnover × Composition Rate)
Pay out of pocket.

Step-by-Step Example

If a Trader has a turnover of ₹45,00,000:
  • Check Limit: 45L < 1.5 Cr (Eligible ✅)
  • Applicable Rate = 1%
  • Tax = 1% of ₹45,00,000 = ₹45,000
  • CGST = ₹22,500 | SGST = ₹22,500

What is the GST Composition Scheme?

Under GST, the Composition Scheme (Section 10) was introduced to reduce the compliance burden on small businesses. Instead of filing monthly GSTR-1 and GSTR-3B, calculating output taxes, matching input tax credits, and issuing complex tax invoices, small taxpayers can simply pay a flat percentage (like 1%) of their turnover to the government.

Turnover Limits Table (2026 Rules)

Business Type Normal States Limit Special States Limit
Traders & Manufacturers ₹1.5 Crore ₹75 Lakhs
Restaurants (No Alcohol) ₹1.5 Crore ₹75 Lakhs
Service Providers ₹50 Lakhs ₹50 Lakhs

Strict Limitations

  • No Input Tax Credit (ITC): You cannot reduce your tax liability using the tax paid on your purchases.
  • No Tax Collection: You cannot issue a "Tax Invoice" or charge GST to your customers. The tax comes out of your own pocket/profit margin.
  • No Inter-state Sales: You cannot sell goods outside your registered state (though you can buy from outside).

Composition vs Regular GST

If you are a B2C business (selling directly to end consumers who don't care about ITC), composition is excellent. It allows you to price your goods cheaper since you don't add 18% GST on top. However, if you are a B2B business (selling to other GST registered businesses), composition is terrible because your buyers cannot claim ITC on purchases from you, meaning they will prefer buying from regular dealers.

Penalties & Late Fees

Composition dealers must file CMP-08 by the 18th of the month following the quarter. They must also file an annual return GSTR-4 by April 30th.

Late Filing Fees

Check exact late fees using our GST Late Fee Calculator. Maximum late fee is capped per the latest amnesties.

Interest on Delay

If you delay the tax payment in CMP-08, interest is charged at 18% per annum on the outstanding amount.

Frequently Asked Questions

1. What is the GST Composition Scheme?
It is a simplified tax scheme for small taxpayers. Instead of filing monthly returns and matching invoices, they pay tax at a nominal flat rate (1%, 5%, or 6%) on their turnover and file a quarterly statement (CMP-08).
2. What is the turnover limit for the Composition Scheme?
For traders and manufacturers, the limit is ₹1.5 Crore (₹75 Lakhs for special category states). For service providers, the limit is ₹50 Lakhs.
3. Can a composition dealer claim Input Tax Credit (ITC)?
No, a composition dealer cannot claim Input Tax Credit (ITC) on their purchases. They also cannot issue a Tax Invoice or collect GST from their customers.
4. Can a composition dealer make inter-state sales?
No, composition dealers are not allowed to make inter-state (out of state) outward supplies of goods or services. However, they can purchase goods from other states.
5. Can I sell through an e-commerce operator?
Starting October 2023, composition dealers are allowed to sell goods through e-commerce operators within their own state (intra-state).
6. What are the rates for different businesses?
Traders/Manufacturers pay 1% (0.5% CGST + 0.5% SGST). Restaurants pay 5% (2.5% + 2.5%). Service providers pay 6% (3% + 3%).
7. What bill does a composition dealer issue?
They must issue a 'Bill of Supply' instead of a 'Tax Invoice'. The bill must strictly contain the words 'Composition taxable person, not eligible to collect tax on supplies'.
8. Who cannot opt for the Composition Scheme?
Manufacturers of ice cream, pan masala, tobacco, aerated water, and bricks cannot opt for this scheme, regardless of their turnover.

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