Hello friends, greetings for the day in the current article we will discuss about ‘Aggregate turnover’ under GST Law.

1. Meaning of Aggregate Turnover Under GST

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.

2. Importance of “Aggregate Turnover

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:-

  • Arunachal Pradesh
  • Mizoram
  • Assam
  • Manipur
  • Meghalaya
  • Nagaland
  • Sikkim
  • Tripura
  • Himachal Pradesh
  • Uttarakhand

And aggregate turnover is also very important to determine the eligibility for “Composition scheme”.

3. Exclusion of “Inward supply” on which RCM is to be paid from aggregate turnover

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).

4. Exclusion of all taxes from Turnover calculation of Aggregate turnover

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.

5. Important inclusions in calculation of Aggregate turnover

  • The value of goods exported or the value of services rendered out of India or both.
  • Inclusion of value of exempted goods or value of services rendered or both.
  • Inter-state supplies between “Distinct person*” having the same PAN would be added to “Aggregate turnover”.
  • Aggregate turnover is to be calculated by taking together the value in respect of activities carried out on all India basis.

6. Distinct person 

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.

In case of any doubts in the current topic or provisions of Indirect taxation (GST and CUSTOMS) then you may contact us at [email protected]

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June 2021