01
Instructions
What the composition scheme is, the eligibility thresholds, the rate table, the key restrictions, and the filing calendar, all in one place. Read this first.
GST Composition Scheme Calculator and Guide for Indian Businesses
Check if you qualify, compare the tax you would pay under composition against the regular scheme, and estimate your quarterly CMP-08 payment. Rates, thresholds, and filing dates built in. Updated FY 2026-27.
- Eligibility checker tells you if you qualify, and which rule disqualifies you if not
- Regular vs composition comparison with a plain recommendation for your business
- Quarterly CMP-08 estimator with the correct GSTR-4 due date (30 June)
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Petpooja presents
GST Composition Scheme Calculator & Guide
For Indian Small Businesses
5
Sheets · Excel calculator
FY 2026-27
What's Inside
Five sheets to make the composition decision
02
Eligibility Check
Enter your turnover, business type, and a few Yes/No answers. The sheet tells you if you qualify, and if not, exactly which rule disqualifies you.
03
Regular vs Composition
The big decision. See the tax you would bear under composition against the regular scheme, factoring in lost input credit, with a plain recommendation.
04
Tax & Filing Calendar
Estimate your composition tax quarter by quarter, and see the CMP-08 and GSTR-4 due dates so you never miss a filing.
05
How It Works
A full walkthrough of the sample figures, the rate and threshold reference, and the trade-off between the two schemes in plain language.
Why This Matters
The Composition Scheme Is a Trade-Off, Not a Shortcut
A 1% flat tax sounds far better than 18%. So plenty of small business owners opt for the composition scheme, then discover the catch only after they have committed for the year.
The catch is threefold. You cannot charge GST to your customers, so the flat levy comes out of your own margin. You cannot claim input tax credit on your purchases, so the GST you pay on stock becomes a dead cost. And you cannot make inter-state sales.
That last point about input credit is where the maths turns. A trader buying ₹28 lakh of stock at 18% GST forfeits over ₹5 lakh of credit under composition. If that trader sells to other businesses, the loss is even worse, because those buyers wanted the credit too.
Which is the real dividing line: your customers. A B2B buyer needs a tax invoice to claim credit, and a composition dealer can only issue a bill of supply. So B2B customers quietly walk away. Composition fits the kirana store, the small eatery, the roadside manufacturer selling to end-consumers, not the wholesaler.
Then there is the filing that trips people up. The composition dealer files GST returns quarterly through CMP-08 and once a year through GSTR-4, which now falls due on 30 June, not 30 April. Plenty of guides still print the old date.
This calculator settles the question with your own numbers. Check eligibility, put in your turnover, purchases, and rates, and see the tax you would bear each way, plus a clear recommendation. All verified against Section 10 and the current CBIC notifications.
Sample Preview
What the calculator shows for a ₹40 lakh trader
Here's a preview of what you'll get inside:
Eligibility: ₹40 lakh turnover, normal state, no inter-state
sales, no notified goods, so Eligible at the 1% trader rate
Composition levy (1% of ₹40 lakh): ₹40,000, paid out of your
margin since customers cannot be charged GST
Input GST forfeited (18% on ₹28 lakh purchases): ₹5,04,000 of
credit you cannot claim under composition
Total composition cost: ₹5,44,000, against a regular-scheme net
GST of ₹2,16,000 (₹7,20,000 output minus ₹5,04,000 credit)
Verdict: the calculator recommends the regular scheme here, since
the ₹5,04,000 of forfeited credit outweighs the low levy. Composition only pulls ahead when input credit is
small
... plus the eligibility checker, the quarterly CMP-08 estimator, the filing
calendar, and a How It Works walkthrough across 5 sheets.
Key Stats
The numbers behind the composition scheme
₹1.5 crore
The turnover limit to opt for composition on goods (₹75 lakh in special-category states). For service providers, the limit is ₹50 lakh. Cross it and you must move to the regular scheme.
Source: Section 10, CGST Act; Notification 14/2019-CT; Notification 2/2019-CT(R)1% / 5% / 6%
Composition rates: 1% for traders and manufacturers, 5% for restaurants, 6% for other services. Unchanged by the GST 2.0 reform of September 2025.
Source: Rule 7, CGST Rules; Notification 2/2019-CT(R)30 June
The GSTR-4 annual return due date, moved from 30 April from FY 2024-25. CMP-08 is due the 18th of the month after each quarter. Old templates still show the wrong date.
Source: Notification 12/2024-CT, dated 10-Jul-2024
Common Mistakes
6 Composition Scheme Mistakes Businesses Make
01
Assuming a low flat rate always means less tax
1% on turnover looks cheap until you count the input credit you forfeit. A high-purchase, high-credit business often pays more under composition than under the regular scheme, as the free composition calculator makes clear.
02
Ignoring the loss of B2B customers
A composition dealer issues a bill of supply, not a tax invoice, so B2B buyers cannot claim credit and tend to leave. Composition suits B2C sellers, not wholesalers.
03
Trying to make inter-state sales
Composition bars inter-state outward supplies. You can buy from other states freely, but the moment you sell across a state border you break the scheme's conditions.
04
Charging GST on the bill anyway
A composition dealer cannot collect GST from customers. Every bill of supply must state "composition taxable person, not eligible to collect tax on supplies", or you invite a penalty.
05
Filing GSTR-4 on the old 30 April date
The GSTR-4 annual return moved to 30 June from FY 2024-25. Working off the old 30 April date means a late fee. CMP-08 is still due the 18th after each quarter.
06
Opting in while making notified goods
Manufacturers of ice cream, pan masala, tobacco, aerated water, and bricks cannot opt for composition. Note it is the manufacturing that is barred, a trader of these goods is fine.
Comparison
Composition vs Regular Scheme
| Aspect | Composition Scheme | Regular Scheme |
|---|---|---|
| Tax rate | 1% / 5% / 6% flat on turnover | 5% / 18% / 40% on value, net of credit |
| Charge GST to customers | No, comes out of your margin | Yes, collected from customers |
| Input tax credit | Not allowed | Fully claimable |
| Inter-state sales | Not allowed | Allowed |
| Document issued | Bill of supply | Tax invoice |
| Returns | CMP-08 quarterly + GSTR-4 yearly | GSTR-1 and GSTR-3B, monthly or quarterly |
| Best for | Low-margin B2C, low input credit | B2B, high input credit, inter-state |
Decide composition vs regular with your own numbers
Download the free calculator, check eligibility, and see the tax you would pay each way in minutes.
FAQ
Frequently asked questions
Who can opt for the GST composition scheme?
Businesses supplying goods (traders, manufacturers, restaurants) with aggregate turnover up
to ₹1.5 crore in the previous financial year can opt for composition, or ₹75 lakh in special-category states.
Service providers and mixed suppliers have a separate limit of ₹50 lakh. You cannot opt in if you make
inter-state outward sales, sell through an e-commerce operator, or manufacture notified goods like ice cream,
pan masala, tobacco, aerated water, or bricks. You opt in through Form CMP-02 before the financial year, or
at the time of GST registration.
What are the composition scheme tax rates?
Manufacturers and traders pay 1% (0.5% CGST + 0.5% SGST), restaurants not serving alcohol pay
5% (2.5% + 2.5%), and other service providers under Notification 2/2019 pay 6% (3% + 3%). Traders pay only on
their taxable turnover, while manufacturers and restaurants pay on total turnover in the state. These rates
were not changed by the GST 2.0 reform of 22 September 2025. You can cross-check any figure with a free GST calculator.
Is the composition scheme always cheaper than the regular scheme?
No. The flat rate is low, but a composition dealer cannot claim input tax credit and cannot
charge GST to customers, so the levy comes out of the margin. A business with large purchases loses a lot of
input credit under composition, which can make the regular scheme cheaper overall. The decisive factor is
usually your customers: B2B buyers need a tax invoice to claim credit, so composition tends to lose them.
This calculator compares both schemes with your own figures so you can see the difference in rupees.
Can a composition dealer make inter-state sales or claim input tax credit?
No on both counts. A composition dealer cannot make inter-state outward supplies of goods,
and cannot claim input tax credit on purchases. However, a composition dealer can make inter-state purchases
freely, only outward inter-state supply is barred. They must also issue a bill of supply rather than a tax
invoice, and display "composition taxable person" on the signboard and bills. If you need to reclaim input
credit, the regular scheme and a proper ITC reconciliation
process suit you better.
What returns does a composition dealer file, and when?
A composition dealer pays tax quarterly through Form CMP-08, due the 18th of the month after
each quarter (18 July, 18 October, 18 January, 18 April), and files an annual return in Form GSTR-4, now due
30 June following the financial year. All of it is filed on the
GST portal.
The GSTR-4 date moved from 30 April by Notification 12/2024-CT. To opt in you file CMP-02, and to exit you
file CMP-04. If you are still deciding whether to register at all, start with the GST registration checklist.
About Petpooja
Petpooja is India's leading SME business software suite, trusted by 1,50,000+ businesses across restaurants, retail, healthcare, manufacturing, and more. From billing and payroll to task management and procurement, Petpooja helps Indian businesses run better, every day.
On composition or regular, your billing should just work
Petpooja Invoice handles both, a bill of supply for composition dealers or a full GST tax invoice for the regular scheme, with the right returns and reports ready to file.
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