How to Calculate Aggregate Turnover for GST Registration?

A business whose aggregate turnover in a financial year exceeds Rs.20 lakhs (or Rs.40 lakh for a supplier of goods) has to mandatorily register under Goods and Services Tax. This limit is set at Rs.10 lakhs for North Eastern and hilly states flagged as special category states. The article explores through the meaning of annual aggregate turnover, turnover in state with examples.

Latest Updates on GST registration

28th May 2021
Due date to file application for revocation of cancellation of registration falling between 15th April 2021 up to 29th June 2021 is 30th June 2021.

1st May 2021
The time limit to take actions, reply or pass orders as given under Rule 9 of the CGST Rules, 2017 that falls between 1st May 2021 and 31st May 2021 has been extended up to 15th June 2021.

5th March 2021
The Search ARN Functionality for Registration, post-TRN Login has been enhanced for the taxpayers.

31st January 2021
1. Persons applying for Registration in Form GST REG-01 as SEZ unit and SEZ developer would now be required to provide the validity period, as per Letter of Approval (LOA)/Letter of Permission (LOP).
2. A functionality has been provided to registrants to upload the copy of Notification issued by MEA /State while applying for Registration on GST Portal in Form GST REG-13.
3. Aadhaar Authentication for one Promoter and Primary authorized signatory has been implemented on the portal for existing taxpayers.

31st December 2020
1. For Taxpayers applying for new registration and opting for Aadhaar Authentication, the authentication would now be required to be done only for one Primary Authorized Signatory and one Promoter/Partner, instead of all.
2. A person registered as a GST Practitioner can now file an application for cancellation of their Registration, in Form GST PCT-06
3. While applying for a new Registration application, the taxpayers will now be shown some additional details related to the same PAN, in a table.
4. Immediately after initiation of GSTIN cancellation, the status of GSTIN for which cancellation is initiated will be shown as “Suspended” on the GST Portal.
5. Taxpayers can select the jurisdiction of CBIC and states/UTs on the basis of PIN code

20th August 2020
An option is given for Aadhaar authentication while obtaining the GST registration. The rules are amended with effect from 21st August 2020 as follows:
1. In case the aadhaar authentication is opted for, it must be completed while submitting the application. The date of application is earlier of the date of aadhaar authentication or fifteen days from the submission of the application in Part B of Form GST REG-01.
2. For the rest of the applicants, physical verification of place of business will be carried out, including document verification, as the case may be, with permission.
3. Cases of deemed approval have also been listed.

Click here to know more about aadhaar authentication.

27th June 2020
The time limit for completion or compliance has been further extended to 31st August 2020, where the time limit falls between the period from 20th March 2020 to 30th August 2020. But it does not include cases where a person needs to obtain GST registration under section 25 (Normal registration) and 27 (Registration as a casual taxable person/ non-resident taxable person) of the CGST Act.

3rd April 2020
The time limit for completion or compliance has been extended to 30th June 2020, where the time limit falls between the period from 20th March 2020 to 29th June 2020. It does not include cases where a person needs to obtain GST registration under section 25 (Normal registration) and 27 (Registration as a casual taxable person/ non-resident taxable person) of the CGST Act.

What is Annual Aggregate Turnover?

As per GST law, “aggregate turnover” refers to 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 an all-India basis but excludes Central tax, State tax, Union territory tax, Integrated tax and cess. 

The aggregate turnover computed for the entire financial year between April of a year up to March of next year is called annual aggregate turnover. In other words, it is the total turnover calculated at a PAN level (all GSTINs put together) being sum of the following:

• Taxable sales value
• Exempt sales value
• Export of goods and services
• Interstate supplies by the business to its sister concern under the same PAN or interstate stock transfer or supplies between distinct persons under the same PAN.

However, the above sum excludes the tax components such as the Central tax, State tax, Union territory tax, Integrated tax and Cess. Further, the taxable value excludes those purchases where the person is required to pay tax under reverse charge. Note that the sales that are subject to reverse charge must continue to form part of the taxable supplies in aggregate turnover.

Meaning of Turnover in State

Turnover in State is different from the aggregate turnover definition. It refers to the the aggregate value of all taxable and non-taxable supplies, including exempt supplies and exports of goods and/or services made within a State by a taxable person and inter-state supplies of goods and/or services made from the State by the said taxable person excluding taxes, if any charged under the CGST Act, SGST Act and the IGST Act, as the case may be. 

In other words, the turnover for a particular GSTIN at state-level including any inter-state supplies undertaken by that GSTIN.

Example for Normal Category States under GST

Here’s an example to help you understand the concept of aggregate turnover.

So Mr. A owns a tea estate with an annual turnover of Rs.1.60 crore by selling tea leaves. This activity is exempt from GST. However, Mr. A also supplies plastic bags along with his crop and charges separately for this. His turnover from the sale of plastic bags is Rs. 5 lakhs and we know that this transaction (sale of plastic bags) is chargeable to GST. In simple words, his taxable turnover is only Rs. 5 lakhs.

Going by the definition of aggregate turnover, Mr. A is required to register under GST because his aggregate turnover exceeds the threshold limit of Rs. 40 lakh. Further, Mr. A does not have the option to register as a composition dealer because this aggregate turnover exceeds the threshold limit of Rs.1.5 crore (Rs 75 lakhs for special category states).

Example for Special Category States Under GST

Below is the list of states which are assigned special status under Goods and Services Tax Law:

• Arunachal Pradesh
• Assam
• Jammu & Kashmir
• Manipur
• Meghalaya
• Mizoram
• Nagaland
• Sikkim
• Tripura
• Himachal Pradesh
• Uttarakhand

The threshold limit of aggregate turnover for all the above states has been kept at Rs. 10 lakh. So the same example will apply here too, but the numbers will get modified.

Let’s assume that the turnover of the farmer Mr. B living in Nagaland is Rs. 15 lakh from agriculture. His taxable turnover from the sale of plastic bags is only Rs. 50,000. Mr. B will still have to register under GST as his aggregate turnover exceeds the threshold limit of Rs. 10 lakh for special category states.

The Government may, at the request of a special category State and on the Council’s recommendations, increase the aggregate turnover referred to in the law from ten lakh rupees to such level, not exceeding twenty lakh rupees, and subject to such conditions and limitations, as may be prescribed in the CGST (Amendment) Act, 2018.

As a result, the threshold limit for the states of Jammu and Kashmir, Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim, and Uttarakhand remains Rs.20 lakhs as of 1st January 2019, and Rs.10 lakhs for the states of Manipur, Mizoram, Nagaland, and Tripura.

Reference of Aggregate Turnover across GST law

For further understanding, read a host of articles by ClearTax:

• Steps to register under GST
• How to file GSTR-1 on the GST portal
• Step-by-step process to file CMP-08 by composition taxable persons

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