GST Composition Scheme Calculator India โ FY 2025-26
Compare Composition Scheme (1%/5%/6% flat tax) vs Regular GST with Input Tax Credit. Analyze the real impact on pricing and margins, and check if your business is eligible. Covers manufacturers, traders, restaurants, and service providers for FY 2025-26.
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How to Use This Calculator
Composition vs Regular tab
Enter your annual turnover and purchases with GST invoices, then select your business type and the GST rate applicable to your sales. The calculator computes composition tax (flat rate on turnover) and compares it with regular GST (output tax minus ITC). It shows which scheme saves you more and the effective GST rate under each.
Real Cost Analysis tab
Enter your selling price and purchase cost per unit (both excluding GST). The calculator shows the real profit per unit under each scheme. Under regular GST, you charge GST to the customer and claim ITC on purchases. Under composition, you cannot charge GST and lose ITC — making your effective purchase cost higher. See how this impacts your margins.
Eligibility Check tab
Enter your turnover, business type, and answer questions about inter-state sales, e-commerce supply, and product type. The calculator checks all eligibility criteria and tells you whether you qualify for composition scheme, with specific reasons if you don't.
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The Formula
The GST Composition Scheme offers a simplified tax computation based on flat rates applied to total turnover:
Composition Rates (FY 2025-26):
Manufacturers & Traders: 1% (0.5% CGST + 0.5% SGST)
Restaurants (not serving alcohol): 5% (2.5% CGST + 2.5% SGST)
Service Providers (turnover ≤ ₹50L): 6% (3% CGST + 3% SGST)
Regular GST Comparison:
Net GST Payable = Output GST on Sales − Input Tax Credit on Purchases
Output GST = Sales × Applicable GST Rate (5%/12%/18%/28%)
ITC = GST paid on business purchases from registered suppliers
Turnover Limits:
Manufacturers, Traders, Restaurants: ≤ ₹1.5 Crore (₹75L for special category states)
Service Providers: ≤ ₹50 Lakhs
Key Trade-offs:
Composition: Lower rate, simpler compliance, NO ITC, cannot charge GST
Regular: Higher rate, full compliance, ITC available, charge GST to customers
The decision between composition and regular depends on your purchase-to-sales ratio: if purchases with GST are a large portion of sales, regular GST (with ITC) may actually result in lower net tax.
Example
Vikram — Garment trader in Surat, ₹80 lakh turnover
Vikram (42) runs a garment trading business in Surat. His annual turnover for FY 2025-26 is ₹80,00,000 (₹80 lakhs). He purchases fabrics worth ₹50,00,000 from GST-registered suppliers. The GST rate on garments above ₹1,000 is 12%.
Option A: Composition Scheme
Option B: Regular GST
Regular GST costs Vikram ₹3,60,000 vs composition costs ₹6,80,000 (including lost ITC). Regular GST saves him ₹3,20,000 per year. However, he must file monthly GSTR-1 and GSTR-3B instead of just quarterly CMP-08. If his purchases were much lower (say ₹10 lakhs), composition would be cheaper.
Priya — Restaurant owner in Kochi, ₹1.2 crore turnover
Priya (35) runs a restaurant (not serving alcohol) in Kochi. Her turnover is ₹1,20,00,000 with food purchases of ₹45,00,000 from registered suppliers. The GST rate on restaurant services (non-AC, non-alcohol) is 5% under regular scheme (but no ITC allowed on restaurant services under regular either since 15 Nov 2017).
For restaurants, the effective rate is nearly identical since regular restaurants also don't get ITC (they opted for 5% without ITC). Priya chooses composition for simpler compliance — quarterly CMP-08 instead of monthly returns, and no need to issue detailed tax invoices.