aggregate turnover under gst

How to Calculate Aggregate Turnover under GST?

Last Update Date : May 31, 2019
Estimated Read Time: 5 min

Aggregate Turnover Limit for GST Registration

The term turnover fundamentally means the annual sales volume of the business after giving the effect of the discounts and the sales tax paid. A business whose aggregate turnover in a financial year exceeds INR 20,00,000 has to register under Goods and Services Tax mandatorily. For Northeastern and hilly states (i.e. Arunachal Pradesh, Assam, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand), this limit is set at INR 10,00,000.

However, irrespective of the turnovers, both the casual taxpayers and non-residents taxpayers are required to register under the GST regime. Also, there are certain situations/transactions mentioned under Section 24 of the CGST Act, wherein, irrespective of Aggregate Turnover, the person is required to get himself registered under the Act.

What is Aggregate Turnover in GST?

According to section 2(6) of the CGST Act, “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 it excludes Central tax, State tax, Union territory tax, Integrated tax and cess.

In simple terms, based on the given definition, the total of the following items shall be considered as aggregate turnover: Value of all –

  • Taxable supplies of goods and services
  • Inter-state supplies
  • Exempt supplies of goods and services
  • Export of goods or services or both

Purpose of Aggregate Turnover

The turnover of up to Rs 20 lakhs is completly exempted from GST and the limit is Rs. 10 lakhs for special category states. The main requirement for GST registration is aggregate turnover

Register your business under GST

Calculation of Aggregate Turnover under GST with Example

Value of all (taxable supplies + Exports + Exempt supplies + Inter-state supplies) – (Taxes + Value of inward supplies + Value of supplies taxable under reverse charge + Non-taxable supplies Value) of a person having the same PAN (Permanent Account Number) across all his business across India.

The charges as given below shouldn’t be considered while calculating the aggregate turnover.

  • CGST, SGST or IGST Taxes
  • The value of Inward supplies of goods and services
  • Value of taxes that are payable on reverse charge mechanism
  • Value of Non-taxable supplies of goods or services like Petrol etc.

[ Read: Types of GST in India ]

Normal Category States under GST (for the limit of INR 20,00,000)

Let us consider a practical scenario to gain a better understanding of the aggregate turnover:  

Mr Anil Kumar is a farmer. His annual turnover is of INR 66,00,000 lakh. This being an agricultural income, the turnover would be exempted from GST. However, Mr Anil Kumar also supplies cardboard cartons along with his yield for which he charges separately. He yields INR 1,20,000 from the sale of cardboard cartons. This turnover of INR 1,20,000 would be chargeable to GST. As defined by law, Mr. Anil Kumar needs to get registered under GST because his aggregate turnover exceeds the threshold limit of INR 20,00,000 lakh. Though, as his aggregate turnover is less than Rs. 1 Crore (as decided in the 22nd GST Council meeting held on 06th October 2017), he may opt for the composition scheme and register himself as a composite dealer.

Special Category States under GST (for the limit of INR 10,00,000)

The same scenario would be applied here too with some modifications in the amounts: Suppose, the turnover of Mr Bipin Kumar, a farmer, who stays in Nagaland, is INR 15,00,000. Further, his taxable turnover from the sale of cardboard cartons is only INR 85,000. Here, since aggregate turnover exceeds the threshold limit of INR 10,00,000, Mr Bipin Kumar still needs to get registered under GST.

The special category states as per Government are:  Arunachal Pradesh, Assam, Manipur, Meghalaya, Nagaland, Tripura, Sikkim, Mizoram, Uttarakhand and Himachal Pradesh.

More Insights on Aggregate Turnover and GST

Further, in case a person has various branches across the world and s/he possesses the same Permanent Account Number (PAN) of Income Tax, his/her turnover for all such branches shall be aggregated.

The below-mentioned items will not form a part of the 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.

What is the Impact of Aggregate Turnover on the Current Situation?

Most of the industry experts have anticipated that GST will expand the taxpayer base in India. The small business owners who were only in the manufacturing sector 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 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.

How can H&R Block help you?

After implementation of GST, the tax compliance requirements changed drastically. As a result, several businesses find it challenging to focus on their business while trying to be GST compliant. This is where we come into the picture. Our team of in-house GST experts can help you meet all the GST compliance requirements right from registration and filing of returns to handling notices.

Focus on your business, not GST. Leave that to H&R Block experts.
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CA Chetan Shinde
CA Chetan Shinde
Chetan is the Lead Tax Advisor at H&R Block (India) with an experience of almost half a decade in audit and taxation. His professional areas of interest are GST advisory and statutory audit. Apart from taxation, he is passionate about social causes and works extensively towards rural school development and literacy.