VS
Composition has lower tax rate (1-6%) but no ITC and limited reach. Regular has ITC + interstate sale freedom but higher compliance.
Pick Regular GST when
You sell to GST-registered businesses (B2B) who want ITC
You make interstate sales
You import / export
Your turnover is above ₹1.5 crore (manufacturing / trading) or ₹50 lakh (services)
Pick Composition Scheme when
You sell mainly to consumers (B2C)
You operate within one state
Your turnover is below ₹1.5 crore (goods) or ₹50 lakh (services)
You want simpler quarterly compliance
Feature
Regular GST
Composition Scheme
Eligibility threshold
No upper limit
≤ ₹1.5 cr (goods) / ₹50 lakh (services)
Tax rate
5%, 12%, 18%, 28%
1% (trader), 5% (restaurant), 6% (services)
Input Tax Credit (ITC)
Available
Not available
Interstate sales
Allowed
Not allowed
Imports / exports
Allowed
Not allowed
Tax invoice
Yes
Bill of Supply only
Returns
Monthly (GSTR-1 + 3B)
Quarterly (CMP-08 + GSTR-4 annual)
Late fees
₹50/day (nil) / ₹100/day
₹50/day (nil) / ₹100/day
B2B credibility
Buyers get ITC
Buyers don't get ITC — many will avoid
Annual compliance cost (via us)
~₹12,000
~₹4,000
Yes — service composition introduced FY 2019-20 at 6% flat (3% CGST + 3% SGST), eligibility up to ₹50 lakh annual turnover.
Yes — file CMP-04 or wait for the next FY. Mandatory to switch if turnover crosses ₹1.5 cr / ₹50 lakh.
Yes at 5% (without ITC). Must operate single-state, can't supply on Swiggy / Zomato (those are inter-state aggregators).