What is GST Composition Scheme Calculator?
Compare GST liability under the Composition Scheme vs Regular GST for small businesses with turnover up to ₹1.5 crore Simply enter your values, and the calculator instantly computes accurate results using standard financial formulas. All calculations are performed entirely in your browser — nothing is stored or transmitted.
Formula Used
Composition scheme: pay fixed % on turnover, no ITC. Regular scheme: charge full GST on sales, claim ITC on purchases. Composition saves compliance effort but loses ITC benefits. Eligible up to ₹1.5 Cr turnover (₹75L for some states).
How to Use This Calculator
- Enter your annual business turnover
- Select business type (traders, manufacturers, restaurants, or service providers)
- Enter total purchases (to calculate ITC under regular scheme)
- Enter total GST paid on purchases
- Click Calculate to compare total tax under composition vs regular scheme
Worked Example
Turnover: ₹80L (trader) | Purchases: ₹50L | GST on Purchases: ₹4.5L | Composition: ₹80L × 1% = ₹80,000 | Regular: (₹80L×18%) − ₹4.5L ITC = ₹9.9L | Composition saves ₹9.1L!
Why Use This Tool?
- Huge tax savings for businesses with low ITC (service providers, restaurants)
- Dramatically simpler compliance — quarterly return instead of monthly
- No GST on business-to-consumer sales displayed on invoice
- Better cash flow as no advance GST collection from customers
Frequently Asked Questions
What is the GST Composition Scheme?
The Composition Scheme is an alternative GST filing option for small businesses with annual turnover up to ₹1.5 crore. Instead of regular GST with monthly returns and ITC, composition taxpayers pay a fixed low percentage on turnover quarterly and file only 4 returns per year (CMP-08 + GSTR-4).
Who should choose composition scheme?
Composition is beneficial for: businesses with B2C (end consumers) sales only, businesses with low input purchases (service providers, restaurants), businesses wanting simpler compliance, and small traders. It is NOT beneficial for B2B businesses whose clients need ITC, or businesses with high purchase GST to claim as ITC.
What are the restrictions of the Composition Scheme?
Restrictions: Cannot collect GST from customers (tax borne by business), cannot issue tax invoice (only bill of supply), cannot claim input tax credit, cannot make inter-state supplies, not available for specific services (non-restaurant). Penalty for wrong scheme selection: pay full GST + interest + penalties.
Explore more business & accounting calculators or try our other free financial tools.