Under the composition scheme you issue a bill of supply, not a tax invoice, with the words "composition taxable person, not eligible to collect tax on supplies", and you charge no GST. Because you cannot claim the GST you pay on purchases, it is part of your cost. FundRaksha Book has a composition mode that prints the bill of supply with that line and folds purchase GST into your selling price.
What composition changes on your bill
| Regular dealer | Composition dealer | |
|---|---|---|
| Document | Tax invoice (Rule 46) | Bill of supply (Rule 49) |
| GST on the bill | CGST + SGST or IGST shown and charged | None charged |
| Declaration | Not needed | "Composition taxable person, not eligible to collect tax on supplies" |
| Input tax credit | Claimed on purchases | Not available; purchase GST is a cost |
| Sales to other states | Allowed (IGST) | Not allowed |
See the bill of supply format for the full list of particulars.
What composition billing software must do
- Print "Bill of Supply" as the title, with your GSTIN and the declaration, and no tax columns.
- Never add GST to the customer's total, even if an item carries a GST rate in its record.
- Price items with the purchase GST included in cost, so your margin is real.
- Give you quarterly turnover figures for CMP-08.
- Switch cleanly to tax invoices if you leave composition.
How FundRaksha Book handles composition
In Book you choose Regular or Composition once, in shop settings. Under composition, bills print as a Bill of Supply with your GSTIN and the line "Composition taxable person, not eligible to collect tax on supplies", and no GST is charged on them.
On the purchase screen, Book adds the GST you paid to the cost before applying your profit %, because you cannot claim it back. Profit % is your margin on the selling price, and if you type a selling price by hand, the margin updates. The profit report treats purchase GST as part of the cost for a composition shop.
Book does not file CMP-08 or GSTR-4; export the day-wise sales report for the quarter and give it to your CA. If you switch to Regular, Book starts issuing tax invoices with GST from then.
FundRaksha Book is free for the first 300 invoices, with every feature switched on and no card needed. Sales and purchase invoices both count. After that, Pro is ₹999 a year for unlimited invoices, paid by UPI, card or net banking; the site says prices include applicable taxes as charged at checkout. See book.fundraksha.com.
Worked example: pricing a composition item
A composition kirana store buys sunflower oil 1 litre at ₹150 plus 5% GST and wants a 10% margin on the selling price.
- Costed base: ₹150 + 5% GST = ₹157.50 (the GST is a cost because it cannot be claimed).
- Selling price for a 10% margin on selling price: 157.50 ÷ 0.90 = ₹175.00.
- The bill of supply shows ₹175 with no GST line.
- If the store sells ₹9,00,000 in the quarter, its composition tax is 1%: ₹9,000 (₹4,500 CGST + ₹4,500 SGST), paid through CMP-08 from its own margin.
A regular dealer with the same cost would price from ₹150, since it claims the ₹7.50 back, and add GST on top at the counter.
Sources
Last reviewed: 2026-10-21. Information for Indian businesses; not legal advice.