Accounting records maintained difference regular vs composite

The key differences in accounting records between Regular and Composition GST dealers:

1. GST Records — Regular Dealer:
- Must maintain: Tax invoices (with HSN, GST rate, CGST/SGST/IGST breakup), purchase register, sales register, stock register, ITC ledger (electronic credit ledger on GST portal), output tax ledger
- Files: GSTR-1 (monthly/quarterly), GSTR-3B (monthly/quarterly), GSTR-9 (annual), GSTR-9C (if turnover > Rs. 5 crore)
- Can collect GST from customers and claim ITC on purchases
- Must issue Tax Invoice for all taxable supplies

2. GST Records — Composition Dealer:
- Issues only Bill of Supply (NOT Tax Invoice) — cannot collect GST from customer
- Cannot claim ITC on any purchases — this is the biggest difference
- Pays GST at a flat rate on turnover (1% for traders, 5% for restaurants, 6% for service providers)
- Files: CMP-08 (quarterly self-assessment) and GSTR-4 (annual return)
- No HSN-wise breakup required in invoices (simplified billing)
- Must display 'Composition Taxable Person, Not Eligible to Collect Tax on Supplies' on every bill

3. Books of Accounts:
- Regular dealer: Detailed purchase/sales ledgers with GST component separation, ITC availed and reversed, party-wise outstanding
- Composition dealer: Simpler books — just sales turnover tracking and flat tax payment. No ITC ledger since ITC is not available. GST paid is treated as a business expense

4. Tally Entry Difference: In Tally for composition dealer, GST is not bifurcated in sales — the composition tax is booked as a direct expense. For regular dealer, CGST/SGST/IGST are tracked as separate ledgers against each invoice.

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Kollipara Sundaraiah

Aashok Kumar Sharma

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