GST Composition Scheme vs Regular Scheme Calculator
The GST composition scheme lets eligible small taxpayers pay a flat percentage of turnover instead of tracking tax invoice by invoice and claiming credit. This calculator shows when that flat rate costs less than the regular scheme after input credit.
Your numbers
Value of outward supplies excluding tax.
Taxable value of inputs and eligible capital goods.
Your results
Indicative comparison only. It excludes the business impact of not issuing tax invoices and of buyers losing input credit, the restrictions on inter-state supplies and e-commerce, the turnover limit applicable to your state, and any changes to rates. Confirm eligibility with your tax adviser.
Tax cost vs annual purchases
Sweeps Annual purchases with GST from 0 to 20000000, holding your other inputs fixed.
Want a customer-impact view of your scheme choice?
An optional review of your sales mix to see how many buyers need input credit from you.
Optional. The tool and every export work without this. No spam.
How to use the calculator
Enter your yearly taxable turnover, the composition rate for your business type, the GST rate you would charge under the regular scheme, and your yearly purchases with the average GST rate on them. The tool compares the flat composition tax with the regular tax net of credit, and shows the saving. The chart varies purchases from zero to two crore so you can see the crossover point. Export the page to PDF to share with a partner or adviser.
How the two schemes differ
Under composition, a manufacturer pays a flat rate on turnover, files a quarterly payment statement, and cannot claim input tax credit or collect tax from customers. A composition dealer issues a bill of supply, not a tax invoice. Eligibility is limited by aggregate turnover, which is lower for special category states, and the dealer cannot make inter-state outward supplies or supply through e-commerce operators in most cases. The regular scheme lets you charge tax and claim credit on purchases.
- No input tax credit under composition
- Bill of supply instead of tax invoice
- No inter-state outward supply in general
- Flat tax is a cost, not collected from customers
Reading the result
With the default figures, a manufacturer with Rs 90 lakh turnover pays Rs 90,000 under composition. Under the regular scheme the output tax of Rs 16.2 lakh is offset by input credit of Rs 9.72 lakh, so net tax is Rs 6.48 lakh. The tool therefore shows a large saving for composition. That is a tax-only view. A B2B customer buying from a composition dealer gets no credit, and may demand a price cut or move to another vendor.
Common mistakes
Small manufacturers often compare only the tax and forget the customer impact. They also forget that purchases from composition dealers carry no credit, that credit is lost on existing stock when moving into composition, and that switching back needs a reversal and fresh credit calculation. Check the eligibility conditions in the Act and notifications for your state before opting in at the start of the financial year.
Frequently Asked Questions
What is the composition rate for a manufacturer?
The commonly applied rate is 1% of turnover, split equally between CGST and SGST, for manufacturers and traders. Restaurants pay 5% and other service providers 6% under their respective provisions. Confirm the current rates and conditions on the GST portal.
Can composition dealers claim input tax credit?
No. Input tax credit is not available to a taxpayer under the composition scheme, and the dealer cannot collect GST from customers. The flat tax is a cost that the business must absorb or price in.
What is the turnover limit for composition?
The general limit is aggregate turnover up to Rs 1.5 crore for goods suppliers, with a lower limit for special category states. Limits are changed by notification, so check what applies to your state at the start of the year.
Which is better for a small manufacturer?
It depends on customers and margins. If most buyers are consumers or other composition dealers, composition often costs less. If buyers are registered businesses who need credit, the regular scheme may protect sales. Use this tool for tax cost and then check the customer side.
If you run a mix of B2B and B2C customers, Netray can help you model the customer-side impact from your own sales data.
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