GST & Tax
GST Composition Scheme Calculator
Quarterly composition tax at 1%, 5%, or 6% of turnover, with your CMP-08 due date and eligibility limit.
Rates last verified 2026-09-23 — always confirm against the current notification before filing.
Lowers the eligibility limit to ₹75 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura. Assam, Himachal Pradesh, and Uttarakhand opted up to the standard ₹1.5 crore limit by separate notification, so leave this unchecked for those states.
No input tax credit under composition — this tax comes out of your margin, not collected separately from customers on a bill of supply.
How composition tax is worked out
The composition scheme, under Section 10 of the CGST Act, lets small businesses pay GST as a flat percentage of turnover instead of the regular rate-by-rate tax on each sale. Traders and manufacturers of goods pay 1% (0.5% CGST + 0.5% SGST), restaurants not serving alcohol pay 5%, and service providers or mixed suppliers under Section 10(2A) pay 6% — all charged on total turnover for the quarter, not on each invoice. A composition dealer can't show GST separately on a bill — they issue a bill of supply, not a tax invoice, and the tax comes out of their own margin rather than being collected from the customer.
The trade-off is no input tax credit. A composition dealer can't claim ITC on what they buy, so the flat rate only works out cheaper than regular GST when the business doesn't have much GST-paid input cost to offset in the first place — which is exactly the profile of most small traders and retailers.
Who's eligible
Aggregate turnover in the preceding financial year has to stay within ₹1.5 crore for goods (₹75 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura), or ₹50 lakh for the services scheme. A business is excluded regardless of turnover if it supplies goods inter-state, sells through an e-commerce operator required to collect TCS, manufactures notified goods like ice cream, pan masala, tobacco, or aerated water, or is a casual or non-resident taxable person.
CMP-08 and GSTR-4
Composition dealers pay tax quarterly through CMP-08, a statement-cum-challan due by the 18th of the month after the quarter ends — 18 July, 18 October, 18 January, and 18 April. The annual return, GSTR-4, summarises the full year and is due by 30 April following the financial year. Miss either, and the usual GST late fee and interest exposure applies just as it would for a regular filer — our GST Late Fee & Interest Calculator covers that separately.
Worked example
A trader with ₹6 lakh turnover in Q2 (July–September), registered in a state with the standard ₹1.5 crore limit: composition tax is 1% of ₹6,00,000 = ₹6,000, split ₹3,000 CGST + ₹3,000 SGST, due via CMP-08 by 18 October. If their turnover in the preceding financial year was, say, ₹90 lakh, they're comfortably within the ₹1.5 crore limit and stay eligible for next year.
Frequently asked questions
Can I charge GST separately from customers under the composition scheme?
No. Composition dealers issue a bill of supply, not a tax invoice, and can't show GST as a separate line item. The composition tax is paid out of your own turnover to the government — it isn't collected on top of your price the way regular GST is.
Why would a business pick composition over regular GST?
Mainly for the lower compliance load — quarterly CMP-08 instead of monthly returns, and a flat rate instead of item-by-item GST accounting. It usually only works out cheaper in absolute tax terms for businesses with little GST-paid input cost to claim as ITC in the first place, since composition dealers give up ITC entirely.
Can a composition dealer supply to another state?
No — inter-state outward supply of goods disqualifies a business from the composition scheme entirely, regardless of turnover. This is one of the most common reasons a business has to move to regular registration.
What happens if my turnover crosses the eligibility limit mid-year?
You have to move to regular GST registration from the date you cross the limit, filing Form CMP-04 to formally opt out, and start charging and collecting GST normally from that point. The composition tax already paid for turnover before the crossover isn't affected.