GST Composition Scheme Calculator (India)
Composition or normal GST? Eligibility, the year both ways and the break-even margin.
Better for your profit
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Can you opt?
The year both ways
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If you opt: what you must do
An estimate for information, not tax advice. It assumes the GST on your purchases is fully creditable under normal GST and keeps your sales the same under both schemes; your accountant can model price changes, mixed rates and credit reversals.
Tax rules and rates change. This calculator follows the rules described on this page and may not cover every situation. Check the official source or a qualified tax professional before filing or invoicing.
About the GST Composition Scheme Calculator (India)
The composition scheme lets a small business pay GST as a small share of its turnover — 1% for traders and manufacturers, 5% for restaurants and 6% for service providers — instead of charging GST on every bill and claiming credit for the GST it pays. It is simpler, but the tax comes out of your own pocket, you cannot claim input tax credit, and you cannot sell to other States.
This calculator checks whether you may opt under section 10 of the CGST Act — the ₹1.5 crore limit (₹75 lakh in eight States), ₹50 lakh for services, and the cases that bar the scheme — and then works out one year both ways from your sales, purchases and GST rates: the tax you pay, what your purchases cost you, your profit, and the break-even level of purchases above which normal GST leaves you more. It ends with what a composition taxpayer must do: CMP-02 before the year, bills of supply, CMP-08 every quarter and GSTR-4 once a year.
How to use it
- Choose your business: trader or shop, manufacturer, restaurant, or service provider (the scheme of section 10(2A)).
- Pick your State and enter last year’s aggregate turnover — it decides whether you may opt.
- Enter this year’s taxable sales before GST and their normal GST rate, and your purchases that carry GST with their rate. Add exempt sales and other costs under More details if you have them.
- Choose how your prices would change: the same total for customers (usual for sales to consumers) or the same price before tax.
- Read the result: which scheme leaves more profit and by how much, the break-even level of purchases, any bar to the scheme, and the year side by side. Copy summary keeps it.
Examples
Normal GST: ₹7,20,000 collected − ₹5,40,000 credit = ₹1,80,000 paid; profit ₹10,00,000 Composition: 1% of ₹47,20,000 = ₹47,200; purchases cost ₹35,40,000; profit ₹11,32,800 Composition leaves ₹1,32,800 more — while purchases stay below ₹37,37,778 a year
Composition profit ₹4,20,000 against ₹10,00,000: customers pay ₹40 lakh instead of ₹47.2 lakh, and the shop absorbs the 1% and the GST on its purchases
Composition 6% of ₹35,40,000 = ₹2,12,400; profit ₹27,37,600 against ₹25,00,000 — better while purchases stay below ₹18,20,000
Normal GST profit ₹11,60,000; composition ₹11,55,000 — almost the same, so the simpler scheme decides
Common uses
- Decide before the financial year starts whether to file CMP-02 and opt for composition.
- Check whether a new shop, café or small consultancy can join the scheme at all.
- See how much margin you need for composition to pay off, and what happens if you cut prices instead.
- Explain the choice to a partner or client with the year side by side.
Who may opt
- Goods and restaurants (section 10(1)): aggregate turnover in the previous financial year up to ₹1.5 crore — ₹75 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand (Notification No. 14/2019-Central Tax). Other services may be supplied up to 10% of last year’s turnover in the State or ₹5 lakh, whichever is higher.
- Services (section 10(2A)): previous-year aggregate turnover up to ₹50 lakh, for those who cannot use section 10(1).
- Not allowed: inter-State outward supplies; supplying services through an e-commerce operator that collects tax at source (goods may be sold through one within your State — Notification No. 36/2023-Central Tax); supplying goods or services not leviable to GST; casual and non-resident taxable persons; and manufacturers of ice cream, pan masala, tobacco, aerated water, fly ash bricks and blocks, building bricks and earthen or roofing tiles (Notification No. 14/2019-Central Tax, as amended).
- All registrations under the same PAN must opt together.
The rates (rule 7)
- Manufacturers: 0.5% central tax + 0.5% State tax = 1% of the turnover in the State.
- Restaurant service (food or drink served, Schedule II paragraph 6(b)): 5% of the turnover in the State.
- Traders and other suppliers of goods: 1% of the turnover of taxable supplies — exempt sales are not taxed.
- Section 10(2A) services: 6% of the turnover of supplies in the State.
The composition taxpayer charges no GST on bills, so the tax is paid out of revenue (section 10(4)). Purchases taxed under reverse charge are paid at the normal rates.
How the comparison works
Under normal GST the calculator adds GST to your taxable sales, credits the GST on your purchases, and takes your profit as sales less purchases and other costs (the GST passes through). Under composition your bills carry no GST: with the same total price, customers pay what they would pay with GST added and you keep it, less the composition tax; with the same price before tax, customers pay less. Either way the GST on your purchases becomes a cost. The break-even is the level of purchases at which both leave the same profit: composition wins when you add a lot of value to what you buy (services, food, crafts) and loses when you resell goods on a thin margin.
Sources
Central Goods and Services Tax Act, 2017, sections 10 and 31, on CBIC’s GST site; CGST Rules, rules 3, 5, 7 and 62; Notifications No. 14/2019-Central Tax (as amended by Nos. 43/2019, 04/2022 and 16/2022), No. 36/2023-Central Tax and No. 2/2019-Central Tax (Rate), on CBIC’s tax information portal.
Limitations
- One rate for all sales and one for all purchases: with mixed rates, use the average or run it once per product group.
- It assumes the same sales under both schemes and that all credit under normal GST is usable; credit reversals for exempt sales (rules 42 and 43) and changes in what customers buy are not modelled.
- Opting in mid-year, stock held when switching, and leaving the scheme are not worked out.
- An estimate for information, not tax advice.
Privacy
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Frequently asked questions
What is the composition scheme limit?
₹1.5 crore of aggregate turnover in the previous financial year for traders, manufacturers and restaurants (₹75 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand), and ₹50 lakh for service providers under section 10(2A). The option lapses on the day this year’s turnover crosses the limit.
What is the composition tax rate?
1% for manufacturers and traders, 5% for restaurant service and 6% for service providers under section 10(2A) — each half central tax and half State or Union territory tax (rule 7). Traders pay on taxable supplies only.
Can a composition dealer sell on Amazon or Flipkart?
Yes for goods, within the State: the e-commerce operator must not allow inter-State sales by a composition taxpayer and collects tax at source as usual (Notification No. 36/2023-Central Tax). Supplying services through an e-commerce operator that collects tax at source is still not allowed.
What must a composition dealer print on bills?
A bill of supply, not a tax invoice, with the words “composition taxable person, not eligible to collect tax on supplies” at the top (rule 5(1)(f)), and “composition taxable person” on the signboard at every place of business (rule 5(1)(g)).
Which returns does a composition taxpayer file?
FORM GST CMP-08 every quarter, by the 18th of the month after the quarter, with the tax paid in cash, and the annual return FORM GSTR-4 by 30 June after the financial year (rule 62).