Key takeaways
What this article covers, in order:
- Composition or regular: which one is your shop?
- What rates apply on the shelf after GST 2.0?
- When does a shop have to register?
- Monthly returns or once a quarter?
- Let's do the sum: Sharma General Store, Indore
- The honest bit about the 200-transaction limit
It's closing time, the cash drawer is counted, and there's a pile of distributor bills under the counter that nobody has entered yet. If your shop is registered under the regular GST scheme, HelloBooks files GSTR-1 and GSTR-3B for you free, directly to the GST portal. But plenty of kiranas are on the composition scheme, which uses different returns (CMP-08 and GSTR-4) that HelloBooks doesn't file. So the first job is figuring out which scheme you're on, and whether it's still the right one.
Composition or regular: which one is your shop?
Here's the difference in one table.
| Composition | Regular | |
|---|---|---|
| Who can opt in | Traders up to ₹1.5 crore turnover (₹75 lakh in special category states) | Any registered business |
| Tax you pay | 1% of taxable turnover for traders | Actual rate per item: nil, 5%, 18% or 40% |
| Bill you issue | Bill of supply, with no GST shown | Tax invoice with GST |
| Input tax credit | None | Yes, subject to the rules |
| Selling to other states | Not allowed | Allowed |
| Returns | CMP-08 quarterly, GSTR-4 yearly | GSTR-1 and GSTR-3B |
| HelloBooks files it? | No | Yes, free for one GSTIN |
For a neighbourhood shop that sells only to households, composition is often the easier life. You pay a flat 1%, the paperwork is light, and your customers don't care about input credit.
Regular starts to make more sense once a few things creep in. Maybe a couple of hotels or office canteens buy from you and want a GST invoice. Maybe your margins on packaged goods are thin and you're paying real money in GST to distributors. Or maybe you'd like to sell online or to a customer in the next state. Composition shuts all of that off.
One thing people get wrong: loose atta, rice, dal, vegetables, eggs and loose milk are nil-rated or exempt under either scheme. For a trader, the 1% composition tax is worked out on taxable turnover. So the honest comparison is 1% of your taxable sales versus your output GST minus ITC. We'll do that sum below.
What rates apply on the shelf after GST 2.0?
From 22 Sep 2025 most kirana items moved into the 5% slab or out of tax altogether. If your billing machine still has last year's rates, that's the first thing to fix.
| On the shelf | Rate since 22 Sep 2025 |
|---|---|
| Loose cereals, pulses, flour, fresh vegetables, eggs, fresh milk | Nil |
| UHT milk, packaged and labelled paneer, Indian breads | Nil |
| Packaged and labelled atta, rice, dal | 5% |
| Ghee, butter, cheese | 5% |
| Biscuits, namkeen, chocolates, instant noodles | 5% |
| Soap, shampoo, toothpaste, hair oil | 5% |
| Aerated drinks | 40% |
The exact rate hangs on the HSN code and on packaging conditions, so check anything doubtful against the CBIC rate notification. Billing ghee at 12% today isn't conservative. It's just wrong, and your B2B buyers will notice.
When does a shop have to register?
A goods-only shop must register once aggregate turnover crosses ₹40 lakh in most states. Some states use ₹20 lakh, and the special category states use ₹10 lakh. Nil-rated sales count toward the figure. So ₹30 lakh of packaged goods plus ₹15 lakh of loose staples puts you over the line, even though only part of it is taxable.
Monthly returns or once a quarter?
A regular-scheme kirana is almost always under ₹5 crore, so QRMP is open to you. GSTR-1 and GSTR-3B become quarterly. GSTR-1 is due by the 13th after the quarter, and GSTR-3B by the 22nd or 24th depending on your state. In the first two months of each quarter you pay the month's tax through PMT-06 by the 25th.
Counter sales to customers don't go into GSTR-1 bill by bill. They go in as a rate-wise B2C summary, which keeps the return short. Only your B2B invoices to registered buyers are listed one by one.
Let's do the sum: Sharma General Store, Indore
Ramesh Sharma runs a mid-sized general store and files monthly. Here's Oct 2026 (illustrative figures):
| Sales | Taxable value | GST |
|---|---|---|
| Loose staples (nil) | ₹2,40,000 | ₹0 |
| 5% items: packaged food, ghee, toiletries | ₹3,20,000 | ₹16,000 |
| 18% items: some cleaning products, plastics | ₹40,000 | ₹7,200 |
| Two canteens on tax invoice (5% goods) | ₹60,000 | ₹3,000 |
| Output tax | ₹26,200 |
His purchases from registered distributors, all visible in GSTR-2B, carried ₹17,000 of GST at 5% and ₹5,400 at 18%. That's ₹22,400 of ITC.
So Ramesh pays ₹26,200 − ₹22,400 = ₹3,800 in cash, split between CGST and SGST. His GSTR-1 is due 11 Nov 2026 and GSTR-3B 20 Nov 2026.
On composition he'd pay 1% of ₹4,20,000 of taxable sales, which is ₹4,200. He also couldn't give the canteens a tax invoice. This month regular wins by a little. In a month when he stocks up heavily before Diwali, his ITC shoots up and regular wins by a lot. In a slow month it might go the other way. Do this comparison over a full year with your CA, never on one month.
The honest bit about the 200-transaction limit
HelloBooks Free allows 200 transactions a year. A busy kirana rings up hundreds of bills a day, so let's be straight about it.
If you enter every counter bill in HelloBooks, you'll pass 200 in the first week. Even a single daily sales entry is 365 a year. Free really only works if you post a monthly sales summary per rate from your billing machine and have a short list of suppliers. Eight or ten regular distributors, billing weekly, will still eat most of the 200.
So for most active shops, Free is the place to set up, see a return go through end to end, and get comfortable. Pro at ₹499/month is where you'll actually live once real volume goes in. It also gives you unlimited users, so your son or your counter manager can log in too. The pricing page has the details.
Where shop owners lose ITC
The most common leak is a distributor who doesn't file. If your bill isn't in their GSTR-1, it isn't in your GSTR-2B, and you can't claim it. Reconcile every month and phone the ones who are always late.
Next is the 180-day rule. If you haven't paid a supplier within 180 days of the invoice, Rule 37 makes you reverse that ITC until you do. Old outstanding balances with a wholesaler can quietly cost you.
Schemes and post-sale discounts that come as GST credit notes reduce your credit, so enter them. And yes, the groceries the family takes home from the shelf aren't business use, so the ITC on them isn't yours to claim.
How HelloBooks helps
HelloBooks files GSTR-1 and GSTR-3B for one GSTIN directly to the GST portal, on both Free and Pro. GSTR-2B reconciliation tells you which distributor bills you can claim this month. UPI, Paytm and PhonePe collections can be reconciled, and bank statement import handles everything else.
Before you file GSTR-3B, you'll see the GST portal's own interest and late-fee figure, so there are no surprises. The mobile app lets you record bills and check reports from the counter. You can also invite your CA into the same books to settle the composition-versus-regular question with real numbers.
If all you want is counter billing and you don't need returns filed, our free GST billing software page explains the difference between billing and filing.
FAQs
Can HelloBooks file returns for a composition kirana?
No. Composition dealers file CMP-08 and GSTR-4, and HelloBooks doesn't file those. It files GSTR-1 and GSTR-3B for regular-scheme shops.
Should I move from composition to regular?
Move if you have business buyers who want ITC, pay a lot of GST on purchases, or want to sell outside your state. If none of that applies, composition is often simpler. Compare a full year's numbers with your CA first.
Do I have to list every customer bill in GSTR-1?
No. Sales to consumers within your state go in as a rate-wise summary. Only B2B invoices are listed one by one.
Is 200 transactions a year enough for a kirana?
Only if you post monthly sales summaries and have few supplier bills. Most active shops will need Pro at ₹499/month.
Is packaged atta taxed now?
Pre-packaged and labelled atta, rice and dal are generally 5%, while loose unbranded ones are nil. Check the HSN conditions before you bill.
Sort out the scheme question first. Everything else about kirana GST gets easier once that's settled.
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