In 30 seconds, find out if your business qualifies for the GST Composition Scheme — a simpler, low-rate alternative to regular GST. See your recommended rate (1% / 5% / 6%) and how much you'd save in annual tax.
The GST Composition Scheme is one of the most under-used benefits in Indian tax law. If your annual turnover is under ₹1.5 crore (or ₹75 lakh in special category states, ₹50 lakh for services), you can pay GST at a flat 1% (traders, manufacturers), 5% (restaurants) or 6% (service providers) instead of the regular 18%. You also file quarterly returns (CMP-08) instead of monthly GSTR-1 and GSTR-3B — saving 20-30 hours of compliance work every year and significantly reducing the cost of doing business.
Yet most eligible small businesses don't opt for it because nobody walks them through the decision. The official CBIC notification is dense, accountants often default to recommending regular GST (more billable hours), and the trade-offs (no input tax credit, no inter-state sales, no e-commerce) aren't obvious until you read the fine print. This tool checks every condition in 30 seconds and tells you a clear yes or no — plus how much you'd save in annual tax.
Who qualifies: traders (kirana, electronics, hardware, textiles), manufacturers (small workshops, food processing, apparel), restaurants (non-AC food service, dhabas, tea shops, sweet shops), and service providers (consultants, freelancers, tuition centres, salons) — provided turnover is below the threshold AND you don't trigger any disqualifier. The biggest disqualifiers are inter-state sales and e-commerce platform usage. If you only sell within your own state and don't use Amazon/Flipkart/Meesho, you're very likely eligible.
What changes if you opt in: you stop charging 18% GST to your customers (your prices become more competitive), you file one quarterly return instead of two monthly returns, you keep simpler books, and you pay tax out of your own pocket on a flat-rate basis. You lose the ability to claim Input Tax Credit on your purchases — which matters more for goods-heavy businesses with large supplier-side GST. The breakeven calculation typically favours composition for retail businesses with thin margins and small customer-side tax burdens, and regular GST for service businesses with B2B customers who need ITC.
The checker compares two scenarios for your specific turnover:
The result shows your composition tax in rupees and a rough comparison of compliance burden. For most small businesses, opting in saves both money and time.
It's a simplified GST option for small businesses with turnover under ₹1.5 crore (₹75 lakh in special category states). You pay a flat rate of 1% (traders), 5% (restaurants) or 6% (services) on your turnover instead of regular 18% GST, and you file quarterly returns (CMP-08) instead of monthly GSTR-1 + 3B.
Businesses with annual turnover up to ₹1.5 crore (₹75 lakh in special category states like Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Uttarakhand). Service providers can opt in if turnover is up to ₹50 lakh. Manufacturers, traders, restaurants and most small service providers qualify.
Inter-state suppliers (you can only sell within your own state), e-commerce sellers (Amazon / Flipkart through TCS), suppliers of non-taxable goods, businesses with ice cream / pan masala / tobacco / aerated water manufacturing, casual taxable persons, and non-resident taxable persons.
Huge. A trader with ₹50 lakh annual turnover pays just ₹50,000 in composition tax (1%) vs ~₹9 lakh in regular GST (18%) — though regular GST is collected from the customer. The real savings come from: (1) no compliance burden of monthly returns, (2) flat rate so easier accounting, (3) no need to maintain detailed input tax credit records. Use the checker above to estimate your specific case.
You can't claim Input Tax Credit (ITC) on purchases, you can't sell inter-state, you can't sell through e-commerce platforms, you must pay tax out of your own pocket (can't pass it to the customer), and you can't issue a tax invoice — only a Bill of Supply. For B2B sellers whose customers want to claim ITC, regular GST is better.
Other free tools small Indian businesses use alongside this one.
