Aggregate Turnover Definition and Analysis under GST

Section 2(6) of Central Goods & Services Tax Act, 2017

“aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;

Analysis

The phrase aggregate turnover is widely used under the GST laws. Aggregate turnover is an all-encompassing term covering all the supplies effected by a person having the same PAN. It specifically excludes:

• Inward supplies effected by a person which are liable to tax under reverse charge mechanism; and
• Various taxes under the GST law, Compensation cess.

The different kinds of supplies covered are:

1. Taxable Supplies

2. Exempt Supplies

3. Supplies that have a NIL rate of tax

4. Supplies that are wholly exempted from SGST, UTGST, IGST or Cess and

5. Supplies that are not taxable under the Act (alcoholic liquor for human consumption and articles listed in section 9(2) and in Schedule III)

Export of goods or services or both, including zero-rated supplies

Aggregate Turnover is relevant  to a person to determine:

• Threshold limit to opt for composition scheme: Rs 1.5 crore in a financial year (Rs 75 lakh in case of supplies effected from special category states)
• Threshold limit to obtain registration under the Act (exclusively supply of goods) : RS 40 lakh (Rs  20 lakh in case of supplies effected  from special category states)
• Threshold limit to obtain registration under the Act(supply of Services or (goods and services both)) : RS 20 lakh (Rs  10 lakh in case of supplies effected  from special category states)
• Inter state supplies between units of a person with the same PAN(Distinct person) will also form part of aggregate turnover.
• For an agent, the supplies made by him on behalf of all his principals would have to be considered while analyzing the threshold limits
• For a job worker, the following supplies effected on completion of job work would not be included in this aggregate turnover when working under Sec 143

1. Goods returned to the principal

2. Goods sent to another job worker on the instruction of the principal

3. Goods directly supplied from the job worker’s premises (by the principal); it would be included in the aggregate turnover to the principal.