Composition scheme
A simpler GST option for small businesses: tax paid as a share of turnover, with fewer returns and no input tax credit.
A business on the composition scheme pays GST as a fixed share of its turnover instead of charging tax on each sale and claiming credit on each purchase. It files fewer returns, and issues a bill of supply rather than a tax invoice.
The trade-off is that it cannot claim input tax credit, cannot charge GST to its customers, and its business customers cannot claim credit on what they buy from it. It suits a business selling mainly to consumers within one state; it rarely suits one selling to other businesses.
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See also: Bill of supply, Input tax credit (ITC)