Email from GST deptt on aggregate turnover- Action to be taken?

This article contains a detailed discussion regarding the e-mail which is being received by many taxpayers on 04^th Aug,20 from the GST dept. (noreply@gstn.gov.in) in context of ‘Aggregate turnover being more than Rs. 5 Cr during FY 2019-20’ And for a better analysis the said e-mail is divided into the following three parts.

Part-1

(Dear 07AXXXX3916K1ZK,

Your aggregate turnover for the financial year 2019-20 has been computed by GST system based on the returns filed in Form GSTR-3B by all registrations on the common PAN. The same has been found to be more than Rs. 5 Cr where returns of FY 2019-20 filed upto 25^th July, 2020 have been considered for the said computation.

Your attention is drawn to definition of ‘Aggregate turnover’, defined under clause 6 of section 2 of the CGST Act, 2017. Accordingly, following methodology to compute aggregate turnover has been adopted:

(a) Turnover declared in Table 3.1(a), 3.1(b), 3.1(c) and 3.1(e) of GSTR-3B has been accounted for the computation.

(b) If the return of a tax period which was due to be filed but has not been filed for any of the GSTINs registered on the common PAN, the turnover of that period has been estimated by way of extrapolation as under:

[(Turnover declared/ No. of GSTR-3B filed) * No. GSTR-3B liable to be filed].

(c) The turnover (including extrapolated turnover) of GSTINs has been summed up at PAN level.)

Author’s comment:

• GSTN has calculated aggregate turnover for F.Y. 2019-20 on the basis of GSTR-3B filed upto 25^th July, 20 “by all Registrants on the common PAN” i.e., all entities having GSTIN on the same PAN. As per Sec 2(6) of CGST Act, 2017, “aggregate turnover” means the aggregate value of
• All taxable supplies {Table 3.1 (a)}
• Export of goods or services or both {Table 3.1 (b)}
• Exempt Supplies {Table 3.1 (c)}
• Supplies that are not taxable under the Act (alcoholic liquor for human consumption   and articles listed in section 9(2) and in Schedule III) {Table 3.1 (e)}
• Inter-state supplies of persons having the same-Permanent Account Number,

to be computed on an all-India basis.

But excludes

• Value of inward supplies on which tax is payable by a person on reverse charge basis
• Central tax, State tax, Union territory tax, Integrated tax and cess.

Further, if return of a tax period is not filed for any GSTIN by the taxpayer then the estimated turnover of that period will be calculated as per following formula:

[(Turnover declared/ No. of GSTR-3B filed) * No. GSTR-3B liable to be filed].

Illustration: If a registered taxpayer filed the returns only for the period Apr to Nov,19 upto 25-07-2020 with total turnover of ₹4 cr then the turnover for the remaining three months will be computed as follows:

So, aggregate turnover for F.Y. 2019-20 will be ₹ 6 Crs.

Part-2

(Further, it is brought to your notice that the above turnover will be used for certain validations in the System such as determining due date of return filing, computation of late fee by the system. You can also use the same for reporting interest on delayed payments based on self-assessment basis.)

Author’s comment:

The above aggregate turnover will be used for determining the due date of return filing, computation of late fees for system validations by the GSTN.

Moreover, a registered taxpayer can also use this calculation of turnover for reporting interest on delayed payment in Table 5.1 of GSTR-3B or payment through Form DRC-03 in certain cases on account of late filing of return. This reporting is still based on self-assessment basis by the taxpayer as interest is not auto populated on GST common portal yet.

Part-3

(If any discrepancy is found in the turnover data based on the computation, as explained above and the actual turnover, the taxpayer may file a grievance at https://selfservice.gstsystem.in for redressal.  The taxpayers are advised to upload the information while raising complaint in following format, which will enable our team to resolve the same.)

Author’s comment:

If you agree that your aggregate turnover during F.Y. 2019-20 exceeds ₹5 cr then you are not liable to take any action regarding this e-mail.

But if not satisfied with the calculation of aggregate turnover by the GSTN, then you may lodge a grievance at the link given above and are advised to upload the PAN-wise information in the above format which will enable the GSTN to resolve the issue.

Further, A hypothetical example is shown below for better understanding.

Disclaimer: The views presented are in personal and generic form and not as a legal advice. Users of this information are expected to refer to the relevant existing provisions of the applicable laws.

The author may be reached at tax.bkansalco@gmail.com.