Provisions Relating to Aggregate Turnover Under GST

Raksha Tiwari

17 Mar, 2023

In this blog, we will cover all the relevant provisions relating to aggregate turnover  Goods & Service Tax laws have specified threshold limits of Aggregate Turnover under GST as registration requirements. Everything including threshold limits, computation of aggregate turnover, exceptions etc. will be discussed here.

What is Aggregate Turnover under GST?

As the term suggests aggregate means total and turnover is referred to the annual sales volume of any organization. The coined word ‘Aggregate turnover’ is referred to the sum total of all supplies made by the taxpayer including taxable as well as non-taxable ones. While computing aggregate turnover certain elements like tax payable, discounts, GST payable on reverse charge mechanism etc. are not included.

While computing turnover under GST one is required to consider all the supplies made by any person under a single Permanent Account Number including:

• Supplies of Goods
• Supplies of Services
• Interstate supplies
• Intrastate supplies
• Taxable supplies
• Non-taxable supplies

This means that if a single taxpayer is running more than one business verticals then while calculating aggregate turnover all the receipts from all such business verticals will be considered.

What is the Purpose of Aggregate Turnover under GST?

Aggregate Turnover plays a vital role under the Goods and Service Tax regime. It is one of the basic criteria for GST registration. Under Goods and Service Tax threshold limits are defined for aggregate turnover. If the aggregate turnover exceeds such specified threshold limit then it becomes mandatory to get mandatory registration. For this purpose, aggregate turnover is calculated by adding up the financials related to all the activities carried on by the concerned person through various entities on a PAN-India basis.

Threshold limits of aggregate turnover

As we discussed under Goods and Service Tax laws clear threshold limits of aggregate turnover are defined as a condition for registration under GST. This threshold limit differs depending upon factors like:

• Location of Registration. state in which place of business is located
• Type of registration. normal taxpayer or taxpayer registered as a composition dealer

Threshold limit of different states is specified in subsection (1) of Section 22 of CGST Act, 2017. We will discuss this in detail here based on the mentioned factors.

• For the Special Category States

Let us first discuss what special category states are. Under Goods and Service Tax the authorities have a specified number of states as special category states. There is a relaxation granted to such special category states as compared to normal states. Special category states include Northeastern and hilly states. For such states, the limit is set at 10 Lakh rupees. Following is a list of states categorized as special category states:

1. Arunachal Pradesh
2. Assam
3. Jammu & Kashmir
4. Manipur
5. Meghalaya
6. Mizoram
7. Nagaland
8. Sikkim
9. Tripura
10. Himachal Pradesh
11. Uttarakhand

• For the Other States

For all the remaining states other than special category states the threshold limit of aggregate turnover is set at 20 lakh rupees. This means that if your aggregate turnover exceeds Rs. 20 lakh in any year that GST registration is a mandatory requirement.

• For Composition Dealer

Unlike registration as a normal taxpayer, the authorities have provided an option to the MSME sectors under Section 10 of Central Good and Service Tax Act, 2017 to register as a Composition Dealer. In order to register under Composition Scheme under GST, the aggregate turnover of the assesses must not exceed 1 Crore rupees. If any taxpayer is running more than one business vertical under a single PAN number then such composition scheme will apply to all such business vertical. And while calculating the aggregate turnover all the proceeds from all such businesses verticals are to be considered.

Initially, the threshold limit for the composition scheme was set at 50 lakh rupees. No taxpayers with aggregate turnover under GST exceeding 50 lakh were allowed to apply under Composition scheme. However, this limit has been increased from 50 lakh rupees to 1 Crore with time.

Computation of Aggregate Turnover under GST

While computing value of aggregate turnover under GST all the proceeds of activities done by the taxpayer on a pan-India basis are added up. This will include proceeds of all business activities carried on under different names but same Permanent Account Number.

What is included?

In order to determine aggregate turnover under GST following amounts must be added:

• Total annual taxable supplies
• All supplies which are exempted under GST
• All Interstates supplies done during the year
• Exports have done during the year

What is not included?

Following items are not inclusive while computing aggregate turnover under GST:

• Goods and Service Tax applicable on such supplies
• Any Tax payable on reverse charge mechanism
• Value of all the inward supplies
• All the supplies which are non-taxable under Goods & Service Tax. For Example petrol, alcohol, etc.

The formula for computing Aggregate Turnover under GST

Aggregate Turnover = (Taxable supplies including interstate and intrastate supplies + Exports + Exempt supplies) – (Applicable GST + Inward supplies + tax payable as reverse charge + Non-taxable supplies)

Computation of Aggregate Turnover for Composition Scheme

Taxpayers registered under composition scheme are eligible for various benefits under Goods and Service Tax. Following categories of taxpayers are eligible for Composition Scheme:

1. Manufacturers
2. Restaurants not serving alcohol
3. Other suppliers of goods including traders and agents

In the case of manufacturers and restaurants, the aggregate turnover is calculated in the same manner as in the case of the normal taxpayer.

However, in the case of other suppliers opting for composition scheme value of only taxable supplies of goods are considered for computing aggregate turnover under GST.

Conclusion

We hope this article was of some help in understanding the concept of aggregate turnover under GST Registration requirement under GST is dependent upon threshold limits of the aggregate turnover of a person.

However, there are certain cases/situations specified under Section 24 of Central Goods and Service Tax Act^[1] under which despite the amount of aggregate turnover GST registration becomes mandatory. Such cases include casual taxpayer, non-resident taxpayer, inter-state supplies, supplies through e-commerce operators, etc.

For any other query related to Goods and Service Tax and GST registration queries, you can contact our experts at Enterslice through Info@enterslice.com.

Read our article:What are the types of GST Return & due dates filing