All comparisons
GST: regular scheme vs composition scheme
The two ways a small taxpayer can be registered under GST and what changes in practice.
| Regular taxpayer | Composition scheme | |
|---|---|---|
| Who it suits | Any registered business; mandatory above the turnover thresholds and for inter-state sellers | Small suppliers of goods, restaurants and some service providers under the prescribed turnover limits |
| Tax payment | Charges GST at the applicable rate on each invoice | Pays a small fixed percentage of turnover and does not charge GST separately on invoices |
| Input tax credit | Can claim credit on eligible purchases | Cannot claim input tax credit |
| Inter-state sales | Allowed | Not allowed for goods |
| Returns | Monthly or quarterly returns (GSTR-1 and GSTR-3B) and an annual return | Quarterly statement-cum-challan (CMP-08) and an annual return (GSTR-4) |
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General guidance only. Suitability and current statutory requirements must be reviewed for your circumstances.
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