Home > GST Home > GST Help Center > Difference between Composite & Regular GSTLast Updated: May 12th 2019

What is the difference between composite GST and regular GST?

Composition Scheme:

The composition scheme is meant for small businesses whose turnover of taxable goods not more than ₹1.5 crores, where GST has to be borne by the seller@1% of such turnover by Traders & @2% by Manufacturers.

The Composition taxpayer cannot issue a tax invoice, because the tax has to be paid by the dealer out of pocket. A Composition Dealer is not allowed to recover the GST from the customers. Service Providers Cannot opt for Composition Scheme.

The Composition Scheme is the very helpful to every small business. Compare to regular GST scheme, the Composition taxpayers required file the totally 5 GSTR ( i.e. Four Quarterly GSTR’s in the form of GSTR-4 & mainly one annual GSTR in a year in the form of GSTR-9A.) They cannot claim the Input Tax Credit on any purchases. They no need to be maintained the books of accounts for GSTR.

Advantages of Composition Scheme:

  1. Lower Tax Payment (Like 1%, 2%,5% etc)
  2. Less Compliance Involved in the Composition Scheme.
  3. Less Tax & High Liquidity

Dis-Advantages of Composition Scheme:

  1. Cannot collect the Tax payment.
  2. Few Taxpayers are preferred the Composition Scheme
  3. Inter-State sales are not permitted.

Regular Scheme or Normal Scheme:

Difference Between Composition Scheme & Regular Scheme

S.noComposition SchemeRegular Scheme
meaningPayment of taxes on prescribed rate on the Turnover without adjustment of input tax credit.Payment of taxes on output tax and considering the eligible input tax credit.
saleThey cannot make Interstate sales. However, they can make lower rates.They can make Interstate sales as well as local sales.
Tax RateLower rate of tax is applicable (like 0%, 5%, 12%, 18% and 28%)Higher rate of tax is applicable (like 0%, 5%, 12%, 18% and 28%)
Filing of Return
  1. Returns of Quaterly-GSTR-4
  2. Annual Return-GSTR-9A
  1. Return of outword supply-GSTR-1
  2. Returns of Inward supply-SGTR-2
  3. Annual Return-GSTR-9
Restrictions on SEZNo Restrictionsfor Exports or supply to SEZ, and SEZ developers.Composition Scheme person cannot make any such supplies
Restrictions on EntryRegistration is allowed any time.Some particular time period is their

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