Regular vs composition taxpayer
1 min read
Updated 03 Oct 2026
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AI summary
Which scheme suits your business, and what each allows.
3 sections
Comparison
| Regular | Composition | |
|---|---|---|
| Turnover limit | None | Up to ₹1.5 crore (₹75 lakh in some special category states); ₹50 lakh for service providers under the 6% scheme |
| Tax rate | As per HSN/SAC (5%, 18%, 40%…) | 1% (manufacturers, traders), 5% (restaurants), 6% (services scheme) on turnover |
| Collect GST from customers | Yes | No — issue a bill of supply |
| Input tax credit | Yes | No |
| Inter-state outward supply | Allowed | Not allowed |
| Returns | GSTR-1 + GSTR-3B (monthly or QRMP) | CMP-08 quarterly + GSTR-4 yearly |
Opting in and out
- Opt in by filing CMP-02 before the start of the financial year.
- You move out automatically once turnover crosses the limit; file CMP-04 to opt out voluntarily.
Who is not eligible
Manufacturers of notified goods (ice cream, pan masala, tobacco and similar), casual and non-resident taxable persons, and inter-state suppliers.
Composition suits small businesses selling to consumers. If most customers are GST-registered businesses, they will prefer a regular supplier because they can claim ITC.
Sources
- Composition scheme turnover limit raised to ₹1.5 crore (₹75 lakh in specified special category states)
PreviousGST registration: who, when and how Next in GST Basics Casual and non-resident taxable persons
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