Tag: Exempt Turnover

Aggregate Turnover is an important concept under the Goods and Services Tax (GST) law because it helps determine various compliance requirements applicable to a taxpayer. Under Section 2(6) of the CGST Act, 2017, aggregate turnover refers to the total value of taxable supplies, exempt supplies, exports of goods or services, and inter State supplies made by persons having the same Permanent Account Number (PAN), calculated on an all India basis. It excludes the value of inward supplies on which tax is payable under reverse charge. It also excludes Central GST, State GST, Union Territory GST and Integrated GST. Aggregate turnover is relevant for determining registration requirements, composition scheme eligibility and other GST provisions.

Computation of Aggregate Turnover:

1. Taxable Supplies

Taxable supplies form an important component of aggregate turnover under Section 2(6) of the CGST Act, 2017. The value of taxable supplies made by a person is included while calculating aggregate turnover. Taxable supplies may include supplies of goods or services on which GST is chargeable. The calculation is made on an all India basis for supplies made under the same PAN. GST charged separately is not included in the value of aggregate turnover. Therefore, the taxable value of supplies, excluding applicable GST, is considered while determining aggregate turnover.

Problem:

A trader makes taxable supplies of ₹8,00,000 and charges GST of ₹1,44,000.

Aggregate turnover = ₹8,00,000, not ₹9,44,000.

2. Exempt Supplies

Exempt supplies are included in aggregate turnover even though GST is not charged on them. Under Section 2(6) of the CGST Act, 2017, the aggregate turnover includes the aggregate value of exempt supplies made by all persons having the same PAN on an all India basis. Exempt supplies include supplies attracting nil rate or specifically exempt supplies, subject to the GST provisions. Therefore, taxpayers must consider both taxable and exempt supplies while calculating aggregate turnover. GST charged separately on taxable supplies is excluded from the calculation.

Problem:

Taxable supplies = ₹6,00,000
Exempt supplies = ₹2,00,000

Aggregate turnover = ₹8,00,000.

3. Export Supplies

The value of exports of goods or services is included in aggregate turnover under Section 2(6) of the CGST Act, 2017. Exports are treated as zero rated supplies under Section 16 of the IGST Act, 2017, but their value is still considered while determining aggregate turnover. Export turnover is calculated without including GST because exports are generally made without payment of IGST under applicable procedures or with payment of IGST followed by refund. Thus, exporters must include the value of their export supplies when calculating aggregate turnover.

Problem:

Domestic taxable supplies = ₹5,00,000
Export supplies = ₹3,00,000

Aggregate turnover = ₹8,00,000.

4. Inter-State Supplies

Inter State supplies are included in aggregate turnover under Section 2(6) of the CGST Act, 2017. The value of goods or services supplied from one State or Union Territory to another is considered while calculating aggregate turnover. This includes taxable inter State supplies as well as other qualifying supplies covered by the definition. The calculation is made on an all India basis for the same PAN. IGST charged on the supply is excluded from aggregate turnover. Therefore, businesses operating across different states must include the value of their inter State supplies in aggregate turnover.

Problem:

Intra State supplies = ₹4,00,000
Inter State supplies = ₹2,50,000

Aggregate turnover = ₹6,50,000.

5. Inward Supplies under Reverse Charge

Inward supplies on which the recipient is liable to pay tax under the Reverse Charge Mechanism (RCM) are specifically excluded from aggregate turnover under Section 2(6) of the CGST Act, 2017. Such supplies are purchases or services received by the taxpayer where GST liability is shifted to the recipient. Since the taxpayer is not making the supply, its value does not form part of the taxpayer’s aggregate turnover. However, outward supplies made by the taxpayer remain included. This distinction is important when calculating turnover for GST registration and other compliance requirements.

Problem:

Outward taxable supplies = ₹7,00,000
Inward supplies under RCM = ₹1,00,000

Aggregate turnover = ₹7,00,000, excluding the RCM inward supplies.

6. GST and Other Taxes

Central GST, State GST, Union Territory GST and Integrated GST are excluded while calculating aggregate turnover under Section 2(6) of the CGST Act, 2017. Therefore, aggregate turnover represents the value of supplies before adding GST charged to customers. This prevents the tax component from being counted as part of the taxpayer’s turnover. The taxpayer should calculate the value of taxable, exempt, export and inter State supplies and exclude the applicable GST amounts. This ensures that aggregate turnover reflects the actual value of supplies rather than the tax collected on those supplies.

Problem:

Taxable supply value = ₹10,00,000
CGST = ₹90,000
SGST = ₹90,000

Aggregate turnover = ₹10,00,000, not ₹11,80,000.

7. All India Basis and Same PAN

Aggregate turnover is calculated on an all India basis for all persons having the same PAN, as provided under Section 2(6) of the CGST Act, 2017. Therefore, a taxpayer cannot generally calculate turnover separately for each state when determining aggregate turnover. The turnover of different registrations under the same PAN must be considered together, subject to the statutory exclusions. This rule is particularly important for businesses operating in multiple states because turnover from different GST registrations may affect registration and eligibility requirements.

Problem:

Maharashtra turnover = ₹7,00,000

Gujarat turnover = ₹4,00,000

Same PAN.

Aggregate turnover = ₹11,00,000.

8. Comprehensive Problem

A business has taxable supplies of ₹10,00,000, exempt supplies of ₹2,00,000, exports of ₹3,00,000 and inter State supplies of ₹1,50,000. It also receives inward supplies under RCM of ₹1,00,000. GST charged on taxable supplies is ₹1,80,000. Under Section 2(6) of the CGST Act, 2017, taxable supplies, exempt supplies, exports and inter State supplies are included. RCM inward supplies and GST charged are excluded.

Problem:

₹10,00,000 + ₹2,00,000 + ₹3,00,000 + ₹1,50,000

Aggregate Turnover = ₹16,50,000.

Practical Problems on Computation of Aggregate Turnover

Problem 1: Basic Computation

Question:

A registered person has the following supplies during the financial year:

Calculate Aggregate Turnover.

Solution:

Aggregate Turnover = Taxable Supplies + Exempt Supplies + Export Supplies

= ₹8,00,000 + ₹2,00,000 + ₹3,00,000

Aggregate Turnover = ₹13,00,000

GST collected and inward supplies under RCM are excluded.

Problem 2: Taxable, Exempt and Inter State Supplies

Question:

A dealer makes taxable supplies of ₹12,00,000, exempt supplies of ₹3,00,000 and inter State supplies of ₹5,00,000. GST charged on taxable supplies is ₹2,16,000. Calculate Aggregate Turnover.

Solution:

GST of ₹2,16,000 is excluded.

Aggregate Turnover = ₹20,00,000

Problem 3: Same PAN in Different States

Question:

A business operates in Maharashtra and Karnataka under the same PAN. Its turnover is:

Maharashtra = ₹9,00,000
Karnataka = ₹6,00,000
Exports = ₹2,00,000
Inward supplies under RCM = ₹1,00,000

Calculate Aggregate Turnover.

Solution:

Aggregate Turnover = Maharashtra Turnover + Karnataka Turnover + Exports

= ₹9,00,000 + ₹6,00,000 + ₹2,00,000

Aggregate Turnover = ₹17,00,000

The turnover is calculated on an all India basis for the same PAN. Inward supplies under RCM are excluded.

Problem 4: Including Exempt Supplies

Question:

A taxpayer has taxable supplies of ₹15,00,000 and exempt supplies of ₹5,00,000. He also receives goods worth ₹2,00,000 under reverse charge. GST collected from customers is ₹3,60,000. Calculate Aggregate Turnover.

Solution:

Aggregate Turnover = Taxable Supplies + Exempt Supplies

= ₹15,00,000 + ₹5,00,000

Aggregate Turnover = ₹20,00,000

The ₹2,00,000 inward supply under RCM is excluded. GST collected of ₹3,60,000 is also excluded.

Problem 5: Comprehensive Problem

Question:

Calculate the Aggregate Turnover from the following information:

Solution:

Aggregate Turnover includes taxable supplies, exempt supplies, exports and inter State supplies.

= ₹10,00,000 + ₹4,00,000 + ₹3,00,000 + ₹5,00,000

Aggregate Turnover = ₹22,00,000

RCM inward supplies and GST collected are excluded.

Problem 6: Multiple GST Registrations

Question:

A company has GST registrations in three states under the same PAN:

Delhi = ₹8,00,000
Maharashtra = ₹12,00,000
Gujarat = ₹5,00,000
Exempt Supplies = ₹3,00,000

Calculate Aggregate Turnover.

Solution:

Aggregate Turnover = ₹8,00,000 + ₹12,00,000 + ₹5,00,000 + ₹3,00,000

Aggregate Turnover = ₹28,00,000

Since all registrations have the same PAN, turnover is considered on an all India basis under Section 2(6) of the CGST Act, 2017.

Problem 7: Find the Excluded Amount

Question:

A taxpayer has total sales including GST of ₹23,60,000. GST charged is ₹3,60,000. Exempt supplies are ₹4,00,000. Inward supplies under RCM are ₹1,50,000. Calculate Aggregate Turnover.

Solution:

Taxable supply value excluding GST:

₹23,60,000 − ₹3,60,000 = ₹20,00,000

Aggregate Turnover:

₹20,00,000 + ₹4,00,000

Aggregate Turnover = ₹24,00,000

RCM inward supplies of ₹1,50,000 are excluded.

Problem 8: Exam Oriented Problem

Question:

A taxpayer reports the following during a financial year:

Taxable supplies = ₹18,00,000
Exempt supplies = ₹4,00,000
Exports = ₹6,00,000
Inter State supplies = ₹3,00,000
Inward supplies under RCM = ₹2,00,000
GST collected = ₹4,50,000

Calculate Aggregate Turnover.

Solution:

Aggregate Turnover = Taxable Supplies + Exempt Supplies + Exports + Inter State Supplies

= ₹18,00,000 + ₹4,00,000 + ₹6,00,000 + ₹3,00,000

Aggregate Turnover = ₹31,00,000

The RCM inward supplies and GST collected are not included.