Every business entity engaged in exclusive supply of goods and whose aggregate turnover in the financial year does not exceed Rs 40 Lakhs in a financial year is required to be registered under the GST Act. For supply of services, aggregate turnover of Rs 20 Lakhs (10 Lakhs in special category States ) is the limit for registration.

The GST Council  increased the threshold limits for GST registration w.e.f 01 April 2019 . The limit has been increased for exclusive supply of goods only. The states have an option to opt for a higher limit of Rs 40 Lakhs or continue with the existing limits of Rs 20 Lakhs (10 Lakh for special category States )

Normal Category States who opted for a new limit of Rs.40 lakh are Chhattisgarh, Jharkhand, Delhi, Bihar, Maharashtra, Andhra Pradesh, Gujarat, Haryana, Goa, Punjab, Uttar Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, West Bengal.

Assam & J&K have also opted to raise the limit to Rs.40 lakh.

Kerala and Telangana who are normal category states choose to maintain status quo ( maintains existing limit 0f  Rs 20 Lakhs )

Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh, Uttarakhand  are the special Category States who opted for new limit of Rs.20 lakh.

Turnover

As per section 2 (6) of the Act for Aggregate Turnover-  “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.

What is Audit under Goods and Service Tax (GST)?

Under section 2(13) of the CGST Act, an audit has been defined as an examination of records, returns and other relevant documents furnished or maintained by the person registered under the GST Acts or under any other law for the time being in force. GST audit is conducted to verify the correctness of taxes paid, turnover declared, input tax credit (ITC) availed and a refund claimed, and to assess the compliance of the registered person with the provisions of the Acts and the rules made there under.

Every person registered under GST Act, whose aggregate turnover exceeds the prescribed limit (i.e. 5 crore rupees) during the financial year, is required to get his books of accounts audited by a (CA) Chartered Accountant or a (CMA) Cost and Management Accountant. The person registered under GST who is required to get his books of accounts audited under GST Act shall submit the Annual Return electronically along with a reconciliation statement, reconciling the declared value of supplies in the GST return furnished for the financial year and a copy of the audited statement of accounts.

Both the reconciliation statement and the copy of audited annual accounts, duly certified, is to be furnished by the registered person in Form GSTR-9C along with the annual return.

For businesses with an annual turnover of less than Rs 5 crore, filing of GSTR-9C for FY 2018-19 has been  waived off.

For the purpose of GST Audit, the term Aggregate Turnover means  “All India PAN-BASED  turnover for a particular financial year”.

Thus, if a taxable entity having multiple GSTIN has aggregate turnover as per its Annual Financial Statement, separate reconciliation statement and Audit Report is required from each branch/division/factory even if aggregate turnover of such branch/division/factory is less than Rs. 5  crores per annum.”.

The person registered under the GST Act, for facilitating the GST audit, shall keep and maintain his accounts to show the correct value in regards to:

  • Outward supply of goods or services or both
  • Stock of goods
  • Production or manufacture of goods
  • Inward supply of goods or services or both
  • Books of accounts point can be added
  • Input tax credit availed
  • Output tax payable and paid

What is Aggregate Turnover in GST?

The “aggregate turnover” is the aggregate value of all taxable supplies, exports of goods or/and services or both, exempt supplies and interstate supplies of persons having the same PAN, to be computed on all India basis. However, such taxable supplies do not include the value of inward supplies on which GST is being paid under reverse charge basis. The aggregate turnover also excludes Central tax, State tax, Union territory tax, Integrated tax and cess.

In other words, the total of the following shall be considered as an aggregate turnover:

  • Value of all taxable supplies of goods and services
  • Value of all Inter-state supplies
  • Value of all exempt supplies of goods and services
  • Value of all export of goods or services or both

Turnover would, therefore, include the following:

  • All taxable supplies other than supplies on which reverse charge is applicable.
  • Supplies between distinct entities (in different States or separate business vertical).
  • Goods supplied to job worker on principal to principal basis.
  • Export or zero rated supplies.
  • Goods received from job worker on principal to principal basis.
  • Supplies of agents/ job worker on behalf of the principal.
  • Exempt supplies under GST: exempt via any notification, non-taxable supplies (like Diesel, Petrol, Liquor etc.)
  • Taxes other than those under GST

However, the following items would be excluded from Turnover:

  • Inward supplies on which taxes are paid under reverse charge
  • Taxes and cesses under Goods and Service Tax
  • Goods supplied for or received back u/s 143 (job work)
  • Interstate supply of services
  • Transactions which are neither supply of goods or service.
  • Supplies provided outside India or received outside India

As per section 2(47) exempt supply means any supply of goods or/and services or both which may be wholly exemption from tax under section 6 or under section 11 of the IGST Act or attract nil rate of tax, and includes non-taxable supply.

How to calculate Aggregate Turnover under GST

Aggregate Turnover will be calculated as follows :-

Value of all (taxable supplies+ exempted supplies +Nil Rated supplies + Zero rated supplies +Non GST supplies ) – (Taxes & 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.

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.

GST Audit Threshold and Rectifications

If the turnover of the registered person exceeds the prescribed limit i.e. rupees 5 crores in a financial year, then the registered person shall get his accounts audited by a (CA) Chartered Accountant or a (CMA) Cost & Management Accountant as per GST Rules.

The annual return is required to be filed electronically through Form GSTR 9C, along with the audited statement of annual accounts, the reconciliation statement and other documents as prescribed as per the GST law.

For businesses with an annual turnover of less than Rs 5 crore, filing of GSTR-9C for FY 2018-19 has been  waived off.

If any mistake/error is noticed in any filled returns during the financial year while auditing the books of accounts, the same can be rectified only in the annual return.

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42 Comments

  1. ARUN AGARWAL says:

    A dealer having two GST No.under same PAN one is trading and one is renting income, in trading firm turnover above 5 cr and in renting TO is 2000000/, in this case are both the firm liable for GST Audit or only trading firm is liable for GST Audit.

  2. adiank says:

    For output services pertaining to period of March 2020,but invoices issued in April 2020 next FY so whether the turnover would be included in March 2020 i.e. FY 19-20 or in April 2020 i.e. FY 20-21

  3. PARKASH KHULLAR says:

    I have business and registered under GST, now I have received rental income 8000/- per month form commercial shop, is I am liable to pay GST Tax on rental income of Rs.8000/- per month or not.

  4. S JEGADEESAN says:

    How to calculate the Turnover of Forex & Air Travel Agent ? Because different % of total value of transaction only considered as taxable value
    So only taxable value should be taken or entire transaction value should be taken while calculating turnover

  5. ANUP GUPTA says:

    Turnover for GST Audit Purpose to be seen on the basis of Full year i.e., from 01.04.2017 to 31.03.2018. you may also refer the technical guide portion.

  6. k.l. verma says:

    I am a orthopaedic disabled person with 66% government employee, please tell me about tex rebate,like standard deduction, transport allowance,80u, and many more… regards k.l.verma

  7. Rajeev says:

    My brother has a medical certificate issued by government hospital stating 50% disability but while the aasessing officer is asking for form 10IA and rejected my claim. Is it mandatory to have 10IA even though i have a medical handicap certificate.pleaae help

  8. Mayuresh Athalekar says:

    how to get exact amount paid under SB interest to claim under 880TTA ? Is there way i can get it automatically or it’s all manual process of tracking my statements ?

  9. Srinivasa Rao Nerall says:

    I had a BULLECTOMY surgical operation in Bangalore on emergency base costing 2.75 lakh rupees and could not be claimed either from my parent organization or health insurance company. Can I get exemption from income tax under 80DDB?

  10. Harry says:

    I have a question related to section 80DDB and wondering if you can help clarifying as I couldn’t able to find an answer. My sister is married and undergone surgery for an ailment qualifying for section 80DDB and the payment done to the hospital was by cash which is more than 1 lakh. Can I claim for this treatment by providing concerned hospital issued letter? My doubt is as sister is married, can I still show as dependent (if questioned)?

  11. M.keerthichandra says:

    Sec 35(5) specifies the word only Turnover,where as the relevant Rule 80 qualifies as Aggregate Turnover.Henceforth as per the definiticon of the word ‘Aggregate Turnover’,even Exempted supplies must also be considered for the purpose of threshold Limit of Rs 2 Cr.
    In case of Petrol Bunks though they may have crores of Supply of petrol which is exempted and small portion of oil which is taxable say for example only 2 Lakhs,they have to file 9C and reconcile the petrol supply as exempted supply.

  12. CMA Sridharan says:

    Can You please explain why the followings are excluded from Turnover Threshold

    Interstate supply of services
    Transactions which are neither supply of goods or service.
    Supplies provided outside India or received outside India

  13. CA. ASHISH SHAH says:

    Sir, Thanks for elaborating the issue.
    Now my question is for F.Y. 2017-18 for G.S.T. Audit purpose whether turnover is to be considered From July 2017 to March 2018 or from April 2017 to March 2018. As there are two views between professionals. So Kindly Guide……………

    1. Advocate Vani says:

      The turnover for the purpose of computing the threshold limit of Rs 2Crores shall be computed from July’17 to Match’18.

      The above is evident from the fomat of reconvciliation statment which at the beginning included the turnover from April’17 to June’17 and later deduct the same to compute the turnover.

  14. Manash Kumar Ghosh says:

    Respected Sir,
    With due respect I would like to ask you that I have enrolled my name under GST Portal as GST Practitioner on Sept 2018. My Enrollment Number is 191800003155GPL would I attempt the NACIN Examination? Please let me know about it. For your kind information I mailed in this regards to GST help desk. Not yet received any reply from there end.

  15. CA. Shakir V Chauhan says:

    Sir, can you add up to your above view about inclusion or exclusion of reimbursement of expenditure incurred for and behalf of customer. It is expended like pure agent and not forming part of our service while deciding total turnover of Rs.2.00 crores.

  16. Chandresh Jain says:

    Dear SIr,
    Turnover in financial year is 2 crore , my question is 2 crore in GST F.Y i.e. from July 17 to March 18 or April 17 to March 18?
    Help me out here.

    1. manognt says:

      For the financial year 2017-18, the GST period comprises of 9 months whereas the relevant section 35(5) uses the expression financial year; Therefore, in the absence of clarification from government, also to avoid any cases of default, it is reasonable to understand that to reckon the turnover limits prescribed for audit i.e., Rs. 2 crores one has to reckon the turnovers for the whole of the financial year which would also include the first quarter of the financial year 2017-18_Source Technical Guide issued by ICAI_Page4.

  17. Harshad Kadam says:

    Sir please let me me know on what basis following transaction are excluded from definition of turnover.

    -Interstate supply of services
    -Supplies provided outside India or received outside India

    1. manognt says:

      For the financial year 2017-18, the GST period comprises of 9 months whereas the relevant section 35(5) uses the expression financial year; Therefore, in the absence of clarification from government, also to avoid any cases of default, it is reasonable to understand that to reckon the turnover limits prescribed for audit i.e., Rs. 2 crores one has to reckon the turnovers for the whole of the financial year which would also include the first quarter of the financial year 2017-18_Source Technical Guide issued by ICAI_Page4.

  18. Astaf Mansuri says:

    in case of petrol pump say petrol/diesel turnover is Rs. 5 cr and oil sale is of Rs. 1 lac only, In VAT Act, VAT audit have been carried out. But in case of GST Audit such turnover of petrol/ diesel should be taken into consideration ? Is it require to carry out GST audit in such cases ?

  19. Vijay Shinde says:

    Sir, how will count the 2crore turnover exceed
    Is it from GST period i.e. only from
    July-17 to March-18 or for whole FY i.e April-17 to March-18 as e.g. to is for Q1 is 60 Lac where VAT audit is applicable and for rest period it is 1.5 cr. Then GST audit shall applicable?

  20. Vikas Pa`ndey says:

    Dear Sir… Thanks for Meaning of Turnover.
    My Aggregate Turn. is greater than 2 Cr. and also liable for GST Audit. My question is, am i liable for GST Audit for those units whose Turnover is Nil or less than 2 Crores ?.

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