GST Composition Scheme: Who Should Opt In & Who Should Not
S
Statura Team
The GST Composition Scheme lets small businesses pay tax at a low flat rate on turnover and file quarterly instead of monthly — a big compliance saving. But it comes with trade-offs.
Eligibility
- Turnover up to ₹1.5 crore (₹75 lakh in special-category states) for goods; ₹50 lakh for eligible services.
- No inter-state outward supplies.
- Not for e-commerce sellers or non-taxable goods suppliers.
Tax Rates
- Traders & manufacturers: 1% of turnover.
- Restaurants (non-alcohol): 5%.
- Eligible service providers: 6%.
The Trade-Offs
You cannot collect GST from customers or claim input tax credit, and you cannot make inter-state sales. For B2B businesses whose buyers want ITC, this is a dealbreaker.
Who Should Opt In?
Small B2C businesses — local retailers, small restaurants — with mostly end-consumer customers benefit most. B2B suppliers usually should stay regular.
Statura advises on the right GST scheme and manages your GST registration and returns.
#GST
#composition scheme
#small business
#compliance