In India, if you own a business or is involved in any activity where the exchange of goods and services takes place, it a necessarily required to get GST Registration in India from their respective states. In this article today we will discuss Aggregate turnover which is an important and vital requirement that determines GST Registration in India.
Definition Of the Aggregate Turnover given in the GST Act.
In the GST Law ,the aggregate turnover is defined in the following form “the aggregate value of all taxable supplies , 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”.
By Analysing the above definition of GST given in the GST Law , we can conclude that Aggregate Turnover is an important criterion for deciding if a business will get exemption in GST tax. According to GST Law if a business whose Aggregate turnover exceeds Rs 20 lakh has to get a GST registration done.Also we can further provided that the aggregate turnover of person having Permanent Account Number or PAN will be computed on all India basis as per GST ACT. From above definition it is evident that Aggregate Turnover will not include the CGST, SGST and IGST while computation. The taxable person may also be liable to pay the tax on reverse charge basis irrespective of the turnover. I would like to also tell you that in case of a registered job worker, the supply of goods will be treated as supply of goods by principal and will not be included in Aggregate Turnover of a job worker.
How to calculate Aggregate Turnover according to GST Law in India.
The aggregate turnover is used for the purpose of calculation of threshold limit of INR 20 lakhs / 10 lakhs for registration and also calculation of eligibility of composition levy under section 10 of the GST Act.
Aggregate turnover shall be calculated by total of the following amounts or sums that are as follows:
- Value of all taxable supplies of goods and services
- Value of exempt supplies of goods and services
- Value of all goods and services exported
- Value of inter-state supplies
Aggregate turnover = Value of all (taxable supplies+Exempt supplies+Exports+Inter-state supplies) – (Taxes+Value of inward supplies+Value of supplies taxable under reverse charge + Value of non-taxable supplies) of a person having the same PAN(Permanent Account Number) across all his business entities in India.
When Calculating Aggregate Turnover the following items will not be included to calculate Aggregate Turnover:
- Any kind of central tax, state tax, union territory, integrated tax, and compensation.
- Inward supplies of goods and services.
- Inward supplies on which the recipient needs to pay tax under the RCM shall not be considered in the calculation of the annual turnover.
- The supply of goods after completion of job work to be treated as the supplies effected by the principal and not to be considered in the aggregate turnover of the Job Worker.
Impact Of Aggregate Turnover
Most of the industry experts have anticipated that GST Law will expand the taxpayer base in India. The small business owners who were exclusively in the manufacturing sector in India pre-GST have suffered due to lowering of GST registration exemption limit; as in pre-GST regime, the registration under Central Tax (Excise Duty) had the basic exemption limit of Rs.1.5 crores. Registration under GST will certainly upsurge the compliance cost like GST Return Filings for small businesses in the short run. However, in the long run, it will surely be of their benefit since the data accumulated by the government will help them to come up with better and more practical policies for small businesses in the future.