1.
Turnover,
in common parlance, is the total volume of a business. The term ‘aggregate
turnover’ has been defined in GST law as under:
“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.
2. The
aggregate turnover is a crucial parameter for deciding the eligibility of a
supplier to avail the benefit of exemption threshold of Rs. 20 Lakhs [Rs. 10
Lakhs in case of special category States except J & K] and for determining
the threshold limit for composition levy. Let us dissect the definition in
small parts to understand the meaning clearly. There are certain terms used in
the definition which need a bit of elaboration.
3. It
may be noted that the inward supplies on which the recipient is required to pay
tax under Reverse Charge Mechanism (RCM) does not form part of the ‘aggregate
turnover’. The law stipulates certain supplies like, Goods Transport Agency
services, services received from outside India, to name a few, where the
recipient of service is made to pay the tax. The value of such supplies on
which tax is paid, would not form part of the ‘aggregate turnover’ of recipient
of such supplies. However, the value of such supplies would continue to be part
of the ‘aggregate turnover’ of the supplier of such supplies.
4.
The second element of value which would not
be included in the ‘aggregate turnover’ is the element of central tax, state
tax, union territory tax and integrated tax and compensation cess.
5. The
value of exported goods/services, exempted goods/ services, inter-state
supplies between distinct persons having same PAN would be added to ‘aggregate
turnover’.
6. Last
but not the least, such turnover is to be calculated by taking together the
value in respect of the activities carried out on all-India basis.
7. The
aggregate turnover is different from turnover in a State. The former is used
for determining the threshold limit for registration as well as eligibility for
Composition Scheme. However, the composition levy would be calculated on the
basis of turnover in the State.
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