GST Composition Tax Calculator

When this applies

• You are a small trader or restaurant weighing the composition scheme against the normal one.
• You have opted in and want to estimate the tax on your turnover for the year.
• You are setting aside money each quarter for the composition tax.
• You are comparing the flat-rate cost against your likely normal-scheme liability.

1% composition tax on INR 50,00,000 turnover

1. 1Annual turnover: INR 50,00,000. Rate: 1%.
2. 2Tax = 50,00,000 x 1 / 100 = INR 50,000 for the year.
3. 3Quarterly approximation = 50,000 / 4 = INR 12,500.

Annual composition tax of INR 50,000, about INR 12,500 a quarter.

What this calculator does

Work out the tax a composition dealer pays on turnover under the composition scheme. Enter the annual turnover and the rate that applies to your category, and it returns the annual tax and a quarterly approximation.

How this is calculated

A composition dealer does not charge GST on individual invoices and does not claim input tax credit. Instead, tax is paid at a flat rate on turnover. The rate depends on the category of business - traders and manufacturers are commonly at 1%, restaurants at 5% - so the calculator takes the rate as an input. The tax is turnover x rate / 100, and it is usually discharged quarterly.

The formula

Tax = turnover × rate/100

Common mistakes to avoid

• Charging GST on invoices while on composition

  A composition dealer cannot collect GST. Doing so is a compliance failure, not a rounding error.

• Using the trader rate for a restaurant

  Rates differ by category. Applying 1% to a restaurant understates the tax.

• Comparing composition tax to net profit

  The tax is on turnover. For a thin-margin business the flat rate can exceed the normal-scheme liability.

• Ignoring the eligibility limits

  Crossing the turnover limit, or making an inter-state supply, can put you outside the scheme mid-year.

Frequently asked

Who can opt for the composition scheme?

Small businesses whose turnover is within the scheme's limit and whose activity is eligible. Suppliers of certain goods, and those making inter-state supplies or selling through an e-commerce operator, are generally excluded. Check the current conditions before opting in.

What rate applies?

It depends on the category. Traders and manufacturers are commonly at 1% of turnover, and restaurants at 5%. Service providers under the scheme have their own rate. Enter the rate for your category.

Can a composition dealer charge GST on invoices?

No. A composition dealer cannot collect GST from customers or claim input tax credit, and issues a bill of supply rather than a tax invoice.

How often is the tax paid?

Quarterly, with an annual return at the end of the year. This calculator shows a simple quarterly approximation - the actual instalments follow the turnover of each quarter.

Is turnover the same as profit?

No. The tax is on turnover - total sales - not on profit. A low-margin business can pay more under composition than it would under the normal scheme.