Aggregate Turnover in GST

What does Aggregate Turnover refer to, and what does it imply?

"Aggregate turnover," as defined by the law, is the total value of all taxable supplies, excluding the value of inward supplies on which a person is taxed on a reverse charge basis, exempt supplies, exports of goods or services or both, and inter-state supplies of persons with the same Permanent Account Number, computed on an all-India basis but excluding Central tax, State tax, Unio tax, and other taxes. The taxes levied by the following statutes are not included in this calculation.

  • CGST(Central Goods and Services Tax)
  • SGST(State Goods and Services Tax)
  • IGST (Integrated Goods and Service Tax)

Inclusion in the Total Turnover:

  • Under the reverse charge method, the value of outward shipments of goods and services on which the recipient is compelled to pay tax.
  • Goods provided on a principal-to-principal basis to job workers.
  • Goods obtained on a principal-to-principal basis from a job worker.
  • When measuring aggregate turnover, an agent's supplies made on behalf of all his principals would be included.

Exclusions from Aggregate Turnover:

  • Table 3.1(d) of GSTR-3B shows the value of inbound supply of goods and services on which the recipient is required to pay tax under the reverse charge method. However, the value of such deliveries would continue to be included in the supplier's "aggregate turnover."
  • Amounts of central, state, union territory, and integrated taxes, as well as compensating cess.
  • Under section 143 of the CGST Act, 2017, goods delivered for job work or received back after job labour.

The following supplies would not be included in a job worker's total turnover:

  • Returned goods to the principal.
  • On the principal's command, goods were sent to another job worker.
  • The primary provides goods directly from the job worker's home.

To calculate aggregate turnover, use the following formula:

Value of all (taxable supplies + exempted supplies + Nil Rated supplies + Zero rated supplies + Non GST supplies) – (GST Act taxes & compensation cess + inwards supplies + reverse charge supplies) of a person with the same PAN (Permanent Account Number) across all of his Indian
business entities.

As an example: Mr. A, who lives in Delhi, is a products merchant. He has a branch in Faridabad with the same PAN. The following is a breakdown of his sales (excluding GST) for the fiscal year 2019-20:-

  • The maximum amount of taxable goods that can be sold from Delhi is Rs. 10 lakhs.
  • The goods sold from Delhi to the Faridabad branch totaled Rs. 5 lakhs.
  • The sale of exempted goods from Faridabad is estimated to be worth Rs. 25 lakhs.
  • The value of goods exported from Delhi is Rs. 4 lakhs
  • The total value of non-GST goods sold in Faridabad is Rs. 1 lakh.
  • The total GST payable on the aforementioned sale is Rs. 2 lakhs.
  • The amount of inward supplies subject to a reverse charge is Rs. 1.5 lakhs.
  • In this case, the total revenue is Rs. 45 lakhs (10+5+25+4+1), and Mr. A will be required to register in Delhi and Faridabad because his total sales exceeds the Rs. 40 lakhs criterion.
  • GST on sales of Rs. 2 lakhs and the value of inward supplies of Rs. 1.5 lakhs are not included in the calculation of aggregate turnover because they come under the exclusion.

The turnover in a state is not the same as the turnover in the aggregate!

  • The turnover in a state is not the same as the aggregate turnover. The former is used to calculate the GST registration threshold and Composition Scheme eligibility. On the other hand, the composition levy would be calculated based on state turnover.

States in the GST's Normal Category

  • Mr. A is a farmer who earns Rs. 55 lakh per year. Because the income is connected to agriculture, the turnover is GST-free. Mr. A, on the other hand, bundles his crop with plastic bags and charges extra for them. His plastic bag sales bring in Rs. 1 lakh in revenue, and we know that this transaction (sale of plastic bags) is subject to GST. In layman's terms, his taxable income is Rs. 1 lakh.
    Mr. A must register for GST because his total revenue exceeds the threshold limit of Rs. 20 lakh, as defined by the definition of total revenue. Mr. A is also unable to register as a composition dealer since his total income exceeds the Rs 50 lakh threshold.

  • Under the GST, there are a number of states that fall under a special category.

  • The following is a list of states that have been granted special status under the Goods and Services Tax Act:
    • Arunachal Pradesh
    • Assam
    • Jammu and Kashmir
    • Manipur
    • Meghalaya
    • Mizoram
    • Nagaland
    • Sikkim
    • Tripura
    • Himachal Pradesh
    • Uttarakhand

FINAL VERDICT!

  • The question of whether GST will broaden India's tax base is a hotly debated topic. As can be seen from the above, GST covers all non-taxable and exempt supplies, including exports. As a result, people who previously profited from the exemption will no longer be able to do so. The suggested scope of aggregate turnover may not provide the expected benefits for small taxpayers. Perhaps as a small-scale firm, you haven't piqued the notice of tax officials yet, but now is the time to register for GST.

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