This research work presents the comparison analysis between an unique structure of T-type inverter and conventional two-level VSI for enhanced reactive power compensation capability in three phase three wire (3P3W) low and medium voltage power utility system (PUS). The icos θ control technique is designed for both types of distributed static compensator (DSTATCOM) to improve the power quality (PQ) of PUS. Here, the T-type inverter is designed by introducing a common source unit with 12 insulated gate bipolar transistor (IGBT) switches. But, the conventional VSI shows its advantages over the T-type inverter such as, reduced number of switches, trouble-free maintenance, higher reliability, improved PQ and reduced total harmonic distortion THD. To justify the capability of traditional VSI based DSTATCOM, results are carried out using MATLAB/Simulink software taking into consideration of benchmark value of the IEEE-2030-7-2017 grid code.