Meaning of Aggregate Turnover under GST

Meaning of Aggregate Turnover:- 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.

Inclusion in Aggregate Turnover:- Aggregate turnover includes:-

• Taxable Supply including supply to distinct person having same PAN (Table 3.1(a) of GSTR-3B)
• Zero Rated Supply (Table 3.1(b) of GSTR-3B)
• Nil Rated Supply and exempted supply (Table 3.1(c) of GSTR-3B)
• Non GST Supply (Table 3.1(e) of GSTR-3B)
• Taxes other than GST
• Value of outward supplies of goods and services on which the recipient is required to pay tax under reverse charge mechanism
• Goods supplied to job worker on principal to principal basis
• Goods received from job worker on principal to principal basis
• For an agent, the supplies made by him on behalf of all his principals would be included while calculating aggregate turnover.

Exclusion in Aggregate Turnover:- Aggregate turnover does not includes:-

• • Value of inward supplies of goods and services on which the recipient is required to pay tax under reverse charge mechanism (Table 3.1(d) of GSTR-3B). However, the value of such supplies would continue to be part of the ‘aggregate turnover’ of the supplier of such services.
  • Amount of central tax, state tax, union territory tax and integrated tax and compensation cess
  • Goods supplied for job work or received back after job work under section 143 of CGST Act, 2017
  • For a job worker, the following supplies would not be included in his aggregate turnover:

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 premises of the job worker by the principal.

• • Transactions which are neither supply of goods nor services i.e Schedule III of CGST Act, 2017 as amended by CGST (Amendment) Act, 2018.

Meaning of Taxable Supply:- As per section 2(108) of CGST Act, 2017 “taxable supply” means a supply of goods or services or both which is leviable to tax under this Act.

Meaning of Exempt Supply:- As per section 2(47) of CGST Act, 2017 “exempt supply” means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt under section 11 of CGST Act, 2017 or under section 6 of the Integrated Goods and Services Tax Act, and includes Non- Taxable supply.

Notification No. 02/2017- Central Tax (Rate) dated 28.06.2017 and Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 for goods and services respectively has been issued by using power as given in section 11 of CGST Act, 2017. Therefore, goods and services listed in the above two notifications are exempted as per the definition given in section 2(47) of CGST Act, 2017. 

Meaning of Nil Rated Supply:- Meaning of Nil Rated supply is nowhere explained in GST Law. The main and the basic difference between both is that in case of Nil Rated Supply the tariff is nil due to which there is no tax whereas in case of exempted supply the tariff is greater than 0% but this is exempted by way of exemption notification (i.e. Notification No. 02/2017- Central Tax (Rate) dated 28.06.2017 and Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 for goods and services respectively). 

The rates for goods and services are given in Notification No. 01/2017- Central Tax (Rate) dated 28.06.2017 and Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 respectively. Notification No. 01/2017- Central Tax (Rate) dated 28.06.2017 contains six schedules which specifies the tax rates at 2.5%, 6%, 9%, 14%, 1.5%, 0.125% and in this notification there is no schedule levying tax at 0% i.e. Nil Rated.

Whereas Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 contains serial no. 24 heading no. 9986 in which services notified as nil rated is specified. Services specified in serial no. 24 of this notification are:-

1. Support services to agriculture, forestry, fishing, animal husbandry; and

2. Support services to mining, electricity, gas and water distribution.

Meaning of Zero Rated Supply:- As per section 16(1) of IGST Act, 2017 “zero rated supply” means any supplies made by a registered dealer as an export (Both goods or services) or supply to an SEZ qualifies for Zero Rated Supplies in GST.

Meaning of Non GST Supply:- As per section 9(1) and 9(2) of CGST Act, 2017 following are the Non GST Supplies:-

1. Petroleum Products (petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel); and

2. Alcoholic liquor for human consumption

Meaning of Supply to Distinct Person:- As per section 25(4) of CGST Act, 2017 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”.

Aggregate turnover is an all-encompassing term covering all the supplies effected by a person having the same PAN.

For Example- XYZ private Ltd. is a manufacturing unit in Chennai, Tamilnadu. They also have service units located in Faridabad and Delhi. Turnover in the following state are as follows:-

Chennai (Tamilnadu)- Rs. 15 Lakhs

Faridabad (Haryana)- Rs. 12 Lakhs

Delhi- Rs. 3 Lakhs

In the case of XYZ private limited, turnover of all the 3 units located in Chennai, Faridabad and Delhi will be added together to consider whether XYZ is liable to register for GST or not. Therefore, the aggregate turnover will be Rs 30 Lakh (15 Lakh + 12 Lakh + 3 Lakh) and are required to get registered under GST.

Formula for calculation of Aggregate Turnover:- Aggregate Turnover will be calculated as follows :-

Value of all (taxable supplies + exempted supplies + Nil Rated supplies + Zero rated supplies + Non GST supplies) – (Taxes & Compensation Cess under GST Act + inwards supplies + supplies under reverse charge) of a person having the same PAN (Permanent Account Number) across all his business entities in India. 

For Example:- Mr. A living in Delhi is a trader of goods. On the same PAN, he has a branch in Faridabad. The detail of his sale (excluding GST) for the financial year 2019-20 is as follows:-

• Sale of Taxable Goods from Delhi is Rs. 10 Lakhs
• Sale of Goods from Delhi to Faridabad Branch is Rs. 5 Lakhs
• Sale of Exempted Goods from Faridabad is Rs. 25 Lakhs
• Export of Goods from Delhi is Rs. 4 Lakhs
• Sale of Non GST Goods from Faridabad is Rs. 1 Lakh
• Total GST on above sale is Rs. 2 Lakhs
• Inward supplies liable to reverse charge is Rs. 1.5 Lakhs

*In this Aggregate Turnover is Rs. 45 Lakhs (10+5+25+4+1) and Mr. A is liable to get registered in Delhi and Faridabad since his aggregate turnover exceed the threshold limit of Rs. 40 Lakhs.

*GST on the sale amounting to Rs. 2 Lakhs and value of Inward supplies amounting to Rs. 1.5 Lakhs are not taken into consideration for the purpose of calculation of aggregate turnover because these falls in the exclusion.

*Sale of goods from Delhi to Faridabad branch is included since as per section 25(4) of CGST Act, 2017 both are distinct person.

*For the purpose of aggregate turnover sale of both Faridabad and Delhi Branch are taken into consideration since aggregate turnover requires to be calculated on PAN basis.

Relevance of Aggregate Turnover:-

• Determining the obligation of registration
• Determining the threshold limit for Composition Scheme (Presently threshold limit of Composition scheme is Rs. 1.5 Crore in a financial year (Rs. 75 lakh in case of supplies effected from special category states).
• Determining the limit for Rs. 1.5 Crore for the purpose of quarterly or monthly filing in case of GSTR-1.
• Calculation of limit for GST Annual Return i.e. GSTR-9 (limit is Rs. 2 crore for Financial Year 2018-19)
• Calculation of limit for GST Audit under section 35 of CGST Act, 2017 i.e. GSTR-9C (limit is Rs. 5 crore for Financial Year 2018-19)
• Determining due dates for filing of GSTR-3B for the period Feb-2020 to Jul-2020 as extended in 40^th GST Council meeting due to Covid- 19 (Notification No. 51/2020- Central Tax dated 24.06.2020 and Notification No. 52/2020- Central Tax dated 24.06.2020 overriding Notification No. 31/2020- Central Tax dated 03.04.2020 and Notification No. 32/2020- Central Tax dated 03.04.2020) and calculation of late fee and interest thereon
• Determining due date for filing of GSTR-3B for the period Aug-2020 as extended in 40^th GST Council meeting due to Covid- 19 (Notification No. 54/2020- Central Tax dated 24.06.2020) and calculation of late fee and interest thereon
• Under section 33 any registered taxable person who fails to file the return u/s 30 i.e Annual return shall be liable to pay a late fee of Rs. 200 for every day from the day such failure continues subject to a maximum of an amount of 0.50% of his aggregate turnover. This can escalate the amount of late fee because it is based on aggregate turnover.

Difference between Aggregate Turnover and Turnover in a State:- The aggregate turnover is different from turnover in a State. The former is used for determining the threshold limit for GST registration as well as eligibility for Composition Scheme. However, the composition levy would be calculated on the basis of turnover in the State.