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Aggregate Turnover Concept in GST

Aggregate Turnover is an important parameter to decide threshold limits under GST. Furthermore, according to the GST law, if an individual is liable to obtain GST registration, then, such taxpayer ought to acquire registration in each State from where he supplies goods or services or both.

Note: If a taxpayer falls under compulsory registration criteria, then he/she needs to obtain GST registration irrespective of his/her Aggregate Turnover.

Aggregate Turnover Criteria For GST Registration

According to GST law, any taxpayer whose Aggregate Turnover in a financial year (FY) surpasses INR 40 Lakhs in case of goods and INR 20 Lakhs in case of services  (INR 20 Lakhs in case of goods and 10 Lakhs in case of services for special category states*) needs to obtain GST registration in the States/UT’s where he/she supplies goods or services or both.

*List of special category states:

  1. Arunachal Pradesh
  2. Assam
  3. Jammu & Kashmir
  4. Manipur
  5. Meghalaya
  6. Mizoram
  7. Nagaland
  8. Sikkim
  9. Tripura
  10. Himachal Pradesh
  11. Uttarakhand

What Is Aggregate Turnover Under GST Law?

In layman terms, turnover means the total sales volume of business. But according to GST law, Aggregate Turnover –

Includes Excludes
Taxable supplies Inward supplies that attract reverse charge
Exempt supplies Integrated Goods and Services Tax (IGST)
Export of goods or/and services Central Goods and Services Tax (CGST)
Inter-state state supplies State Goods and Services Tax (SGST)
Union Territory Goods and Services Tax (UTGST)
CESS

Note 1: Aggregate Turnover is calculated on the Permanent Account Number (PAN) basis. This means – if an individual has four branches (having the same PAN) in 4 different states, turnover of all branches will be considered to ascertain Aggregate Turnover.

Note 2: The value of exported goods or services, exempted goods or services, inter-state supplies between distinct persons having the same PAN would be added to ‘Aggregate Turnover.’

How to Ascertain Aggregate Turnover?

Let us comprehend the calculation of Aggregate Turnover with an example.

ABC Pvt. Ltd. is an assembling unit in New Delhi. They have service units situated in Maharashtra and Rajasthan. Other details are mentioned in the table given below:

Business Unit of PAN Location Turnover (INR)
ABC Pvt. Ltd. XXXXXX1234 Delhi 27,00,000
ABC Pvt. Ltd. XXXXXX1234 Maharashtra 8,00,000
ABC Pvt. Ltd. XXXXXX1234 Rajasthan 6,00,000

In this case, turnover of all the three units situated in Delhi, Maharashtra and Rajasthan will be included to calculate the Aggregate Turnover, as these units are registered under the same PAN. Thus, as per this illustrated calculation – ABC Pvt. Ltd. will have to get registered under the GST law because the Aggregate Turnover is totalling to INR 41 Lakhs.

Why is Aggregate Turnover Important in GST?

It is interesting to note that a company’s annual turnover can decide so many factors for it. Under the GST law, the Aggregate Turnover helps to circumscribe these aspects:

  1. Obligation to register under the GST regime.
  2. Opt-ing for Composition Scheme – Taxpayers with Aggregate Turnover lesser than 1.5 crores (INR 75 lakh in case of supplies from special category states) can opt to pay a fixed rate as GST under the Composition Scheme.
  3. Calculation of late fee – Delay in the filing of the Annual GST return can attract a late fee of INR 100 for every day when such failure continues subject to a maximum of an amount of 0.25% of the Aggregate Turnover.
  4. GST Audit – Registered persons whose Aggregate Turnover exceeds INR 2 crore during a financial year are liable for GST Audit.