Hello friends, greetings for the day in the current article we will discuss about ‘Aggregate turnover’ under GST Law.
As per section 2(6) of CGST 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.
The aggregate turnover is an important parameter for deciding the eligibility of a supplier to avail the benefit of exemption threshold of Rs 20 Lakhs. However the exemption limit is Rs 10 lakhs in case of Jammu and Kashmir and Special category state:-
And aggregate turnover is also very important to determine the eligibility for “Composition scheme”.
It may be noted that the inward supplies on which the recipient is required to pay tax under RCM (Reverse charge mechanism) does not form part of aggregate turnover. The law stipulates that certain supplies like (Goods transport agency, Services received from outside India etc) where the recipient is of services is made to pay the tax instead of the supplier of service. The value of such supplies on which tax is paid on reverse charge basis would not form part of “Aggregate turnover”. However the value of such supplies would continue to be part of aggregate turnover of the supplier of supplies(Service).
The second exclusion element for the calculation of Aggregate turnover is the element of Central tax , State tax, Union territory tax, Integrated tax and compensation cess. So while calculating the aggregate turnover we must exclude the tax element for checking the eligibility under various provisions applicable.
Distinct person – According to section 25(4) of CGST Act a person who has obtained or is required to obtain more than one registration whether in one State or Union territory or more than one State or Union territory shall in respect of each of such registration would be treated as “Distinct person”.
The aggregate turnover is different from turnover in state. The former is used for determining the threshold limit for registration as well as eligibility of composition scheme. However the composition levy would be calculated on the basis of turnover of state.
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