The composition scheme lets eligible small businesses below a notified turnover pay GST at a low flat rate on their turnover instead of the regular rates, with simpler quarterly payments and an annual return. In exchange, they cannot collect GST from customers as a separate charge or claim input tax credit, and there are restrictions on inter-state sales.
It suits very small, largely local businesses that value simplicity over ITC. Larger or inter-state businesses generally stay under the regular scheme.