The composition scheme sounds simpler — but it usually doesn't fit online sellers. Here's the honest comparison.
The GST composition scheme lets small businesses pay tax at a low flat rate with simpler returns. It's attractive on the surface, but it comes with restrictions that rule out most e-commerce sellers.
You pay a small percentage of turnover as tax (e.g. 1% for traders) and file simpler quarterly statements. But you can't collect GST from customers, can't claim input tax credit, and can't make interstate supplies.
| Feature | Composition | Regular |
|---|---|---|
| Interstate sales | Not allowed | Allowed |
| Input tax credit | No | Yes |
| Sell via marketplaces | Restricted | Yes |
| Returns | Simpler | GSTR-1 + 3B |
Purely local, single-state businesses with no input-credit needs — a neighbourhood shop, say. For online sellers, regular registration with proper input credit wins.
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💬 Talk to our team View plans →Generally no. Suppliers of goods through e-commerce operators that collect TCS can't opt for composition.
No. Composition dealers cannot make interstate outward supplies, which rules out pan-India selling.
No. Composition dealers cannot claim input tax credit.
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