Small businesses having annual turnover less than Rs. 75 lakhs can opt for Composition scheme.
Composition dealers will pay nominal tax rates based on the type of business:
Composite Scheme - Applicable to GST Rates
| Type of Business | CGST | SGST | Total Tax |
| Manufactures | 1% | 1% | 2% |
| Traders ( Goods ) | 0.5% | 0.5% | 1% |
| Suppliers for Food & Drinks for Human Consumption | 2.5% | 2.5% | 5% |
Service Provides - Cant Opt for Composition Scheme
- Composition dealers are required to file only One quarterly return (instead of three monthly returns filed by normal tax payers).
- They cannot issue taxable invoices, i.e., collect tax from customers and are required to pay the tax out of their own pocket.
- Businesses that have opted for Composition Scheme cannot claim any input tax credit.
Composition scheme is Not applicable to :
- Service providers
- Inter-state sellers
- E-commerce sellers
- Supplyier of non-taxable goods
- Manufacturer of Notified Goods
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