Letter C
Composition Scheme
Simplified GST scheme for small taxpayers paying tax at a fixed rate on turnover.
Calculation / formula
Tax is paid as a percentage of turnover (not invoice-wise ITC); rates and limits are notified by law.
Frequently asked questions
- Who can opt for the composition scheme?
- Eligible small taxpayers within prescribed turnover limits and business categories may opt in, subject to conditions (e.g. no inter-state outward supplies in many cases). Check current notifications.
- Can composition dealers issue tax invoices?
- They generally issue a Bill of Supply instead of a tax invoice and cannot charge GST separately.