Composition Scheme vs Regular GST – Which to Choose?
Composition scheme is a simpler GST option for small businesses. Here’s the difference.
Composition Scheme
- Turnover limit – Up to ₹1.5 crore (₹75 lakh in some states)
- Tax rate – 1% (goods), 5% (restaurant), 6% (services)
- No ITC – You cannot claim input tax credit
- Limited compliance – Quarterly return, simpler
- No inter-state – Cannot sell inter-state (except to Jammu & Kashmir)
- No reverse charge – Buyer pays RCM if you supply under composition
Regular GST
- No turnover cap for registration (mandatory above ₹20/40 lakh)
- Full ITC – Claim credit on purchases
- Inter-state – Can sell anywhere
- More compliance – Monthly/quarterly returns, invoices with full details
For Kirana Shops
If you’re under ₹1.5 cr and buy mostly from registered suppliers (so ITC matters less), composition can simplify things. If you sell inter-state or need ITC, go regular.
Stockkeeper supports both. Join the waitlist.
Frequently Asked Questions
What is the composition scheme turnover limit?
Up to ₹1.5 crore for goods. No input tax credit. Cannot sell inter-state.
Can I claim ITC under composition scheme?
No. Composition dealers cannot claim input tax credit.
Should I choose composition or regular GST?
If under ₹1.5 cr and no inter-state sales, composition simplifies compliance. Need ITC or inter-state? Go regular.