Home GST Aggregate Turnover for GST Registration in India
Aggregate Turnover for GST Registration in India

Aggregate Turnover for GST Registration in India

86
0

Aggregate Turnover for GST Registration in India

Under GST Act, if a business entity or a business owner supplying goods and services earns a turnover above the threshold limit specified by the GST Act then such entity or owner should take a mandatory registration under the GST and pay the taxes as the liability arises. For this, it is mandatory that the aggregate turnover is computed so as to see if the same is crossing the threshold limit.

So, what is Aggregate Turnover?

Taking virtue of the GST Law or the GST Act, we can say that the aggregate turnover is the aggregate value of the taxable supplies which are made by the business entity or the owner of the entity. But it shall exclude the following while computing the aggregate turnover for a relevant financial year:
– Value of the supplies which are made inward to the entity and the tax liability of the same shall be met and paid by another person under the Reverse Charge Mechanism (RCM), and
– Taxes like Central (CGTS), State (SGST), Union Territory (UTGST), Integrated (IGST), and Cess.
But it shall include:
– Supplies which are exempt
– Goods or services or both which are exported
– Inter-state supplies which are done by the taxpayers with the same PAN (Permanent Account Number)
For the computation of aggregate turnover, the financial year shall be considered. This shall start from 1st of April one year and end on 31st of March of the next year making the same 1 financial year. The turnover shall be computed on PAN level which means that the turnover shall be computed by putting together all the ones with common GSTINs together. Hence, we can say that it shall be a sum of:
– Supply value of taxable one’s
– Supplies which are exempt
– Goods or services or both which are exported
– Inter-state supplies which are done by the tax payers with the same PAN (Permanent Account Number)
Value of the supplies which are made inward to the entity, and the tax liability of the same shall be met and paid by another person under the Reverse Charge Mechanism (RCM):
As per the GST Act, certain supplies which are made by the supplier like Goods transport Services or services which are received from a person residing out of India and such other services as per the list require, the recipient of the service to pay tax or GST under the RCM. This due to this same reason shall not fall under the purview of turnover and shall not form part of the aggregate turnover computation for the purpose of the applicability of GST registration.
It shall also be noted that the meaning of turnover in the case of the state is different, as the state level turnover of all the businesses with the same PAN shall be computed for testing eligibility of the Composition Scheme which is available to the business owners under the GST.
Let’s take an example for understanding aggregate turnover computation under GST. Mr. A is a vendor who is selling meat and fish. The turnover earned by him during the year from the supply of such meat and fish which is exempted under GST is INR 50 Lakhs. Mr. A also supplies a wrapping cover which is a plastic-based wrap type bag with each sale and charges a small extra amount with the same. During the year, the turnover from the sale of such bags was INR 3 Lakhs and this is a taxable service. Now for the purpose of GST applicability, Mr. A wants to compute his aggregate turnover and this shall be INR 53 Lakhs as exempted supply shall also be included in the same. So, even if the taxable supply is below INR 40 Lakhs also, he shall be applicable with GST registration availing as the total turnover is more than INR 40 Lakhs.

Effect of this Requirement

When the GST Act and its allied provisions stipulate the adding of exempt services in the computation of aggregate turnover, we can see that many small businesses would be affected as they should mandatorily take registration under GST. This would not mandate or make them pay GST on any exempt services but would increase their compliance cost as they should file monthly returns under the GST Act declaring their supply.

Threshold Limit for GST Registration

The 32nd GST Council Meeting which was held on the 10th day of January 2019 revised the threshold limit which was specified for availing mandatory registration under GST.
Earlier the limit that was mandated by the GST Act, for availing mandatory registration in case of the supply of goods or services were as follows:
– Turnover exceeds INR 20 Lakhs in case of Normal Category States
– Turnover exceeds INR 10 Lakhs in case of Special Category States
But the revised threshold exemption is as below:

For supply of Goods:

a.i) Turnover exceeds INR 40 Lakhs in case of Normal Category States
a.ii) Turnover exceeds INR 20 Lakhs in case of Special Category States

For supply of Services:

In the case of services the old limit shall apply which is:
b.i) Turnover exceeds INR 20 Lakhs in case of Normal Category States
b.ii) Turnover exceeds INR 10 Lakhs in case of Special Category States
The special category states which are specified above include the following:

  1. Arunachal Pradesh
  2. Assam

iii. Jammu & Kashmir

  1. Manipur
  2. Meghalaya
  3. Mizoram

vii. Nagaland
viii. Sikkim

  1. Tripura
  2. Himachal Pradesh
  3. Uttarakhand

Any other state shall be considered as the one belonging to the Normal Category States.
Thus, we can now conclude that, the business entities and owners engaged in the supply of goods or services or both in the country of India shall make the constant computation of their aggregate turnover pertaining to the definition as given by the GST Act, for verifying the applicability of GST registration for them. They shall also determine the state category they belong to i.e., the Normal Category States or the Special Category States such that the threshold limit shall also be ensured in such manner.
 

(86)

Comment(0)

LEAVE YOUR COMMENT

Your email address will not be published.

Please fill this form and we'll get back to you as soon as possible!


 

Easy Payment Options Available
No Spam. No Sharing. 100% Confidentiality