Expert Verdict
Regular GST for B2B businesses and those near/above ₹1.5 crore; Composition for small retail/food businesses
The Composition Scheme offers a flat low tax rate with minimal compliance but has critical restrictions: no ITC, no interstate supply, and customers cannot claim ITC on your invoices. For any B2B business or business supplying interstate, Regular GST is the only viable option.
Side-by-Side Comparison
| Factor | Regular GST | Composition Scheme |
|---|---|---|
| Turnover Limit | No upper limit | Up to ₹1.5 crore (₹75 lakh for select states) |
| Tax Rate | 5%–28% depending on HSN/SAC | 1% (traders), 5% (restaurants), 6% (manufacturers) |
| Input Tax Credit | Yes — can claim ITC on all purchases | No — ITC not available |
| Interstate Supply | Yes — allowed | No — not permitted |
| Invoice Type | Tax Invoice with full GST breakup | Bill of Supply (no GST charged to customer) |
| Return Filing | GSTR-1 + GSTR-3B monthly (or quarterly QRMP) | CMP-08 quarterly + GSTR-4 annually |
| e-Commerce Supply | Yes | Not allowed through e-commerce operators |
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Get Free ConsultationWho Should Choose What?
Choose Regular GST if you are:
- B2B businesses selling to GST-registered customers
- Businesses with interstate sales
- Businesses with high input purchases (can claim ITC)
- E-commerce sellers on Amazon, Flipkart etc.
- Exporters (eligible for zero-rated supplies)
Choose Composition Scheme if you are:
- Small retailers selling to end consumers
- Restaurants and food service businesses
- Local service providers with turnover below ₹50 lakh
- Businesses wanting minimal GST compliance
- Businesses with low input costs (ITC not valuable)
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