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AGGREGATE TURNOVER

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AGGREGATE TURNOVER
By: Mr. M. GOVINDARAJAN
September 25, 2017
  • Contents

Aggregate turnover

The expression ‘aggregate turnover’ is used in GST provisions in many a place.  The expression ‘aggregate turnover’ is defined in Section 2(6) of the Central Goods and Services Tax Act, 2017 (‘Act’ for short) as 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.

Turnover in State or Turnover in Union territory

Section 2(112) defines the expression ‘turnover in State’ or ‘turnover in Union territory’ as 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) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and inter-State supplies of goods or services or both made from the State or Union territory tax by the said taxable person but excludes central tax, State tax, Union territory tax, integrated tax and cess.

Threshold limit for composition levy

Section 10(1) provides that notwithstanding anything to the contrary contained in this Act but subject to the provisions of sections 9(3) and 9(4), a registered person, whose aggregate turnover in the preceding financial year did not exceed ₹ 75 lakhs, may opt to pay, in lieu of the tax payable by him, an amount calculated at such rate as may be prescribed, but not exceeding-

  • One per cent of the turnover in State or turnover in Union territory in case of a manufacturer;
  • Two and half per cent of the turnover in State or turnover in Union territory in case of persons engaged in supplies referred to in clause (b) of paragraph 6 of Schedule II; and
  • Half per cent of the turnover in State or turnover in Union territory in case of other suppliers,

subject to such conditions and restrictions as may be prescribed.  The Government may, by notification, increase the threshold limit to such higher limit, not exceeding one crore rupees as may be recommended by the Council.

The aggregate turnover for opting composition scheme for the special category of States is fixed as fifty lakh rupees.

Section 10(3) provides that the option availed by a registered person shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds the limit specified in this section.

Input service distributor

Section 20 provides that the Input Service Distributor shall distribute the credit of central tax or integrated tax and integrated tax as integrated tax or central tax, by way of issue of a document containing the amount of input tax credit being distributed in such manner as may be prescribed.

Section 20(2) provides that the Input Service Distributor may distribute the credit subject to certain conditions amongst which the following-

  • the credit of tax paid on inputservices attributable to more than one recipient of credit shall be distributed amongst such recipients to whom the input service is attributable and such distribution shall be pro rata on the basis of the turnover in a State or turnover in a Union territory of such recipient, during the relevant period, to the aggregate of the turnover of all such recipients to whom such input service is attributable and which are operational in the current year, during the said relevant period;
  • the credit of tax paid on input services attributable to all recipients of credit shall be distributed amongst such recipients and such recipients and such distribution shall be pro rata on the basis of turnover in a State or turnover in a Union territory of such recipient, during the relevant period, to the aggregate of the turnover of all recipients and which are operational in the current year, during the said relevant period.

Rule 39 (1)(d) provides that the input tax credit that is required to be distributed as above to one of the recipients ‘R1’ whether registered or not, from amongst the total of all the recipients to whom input tax credit is attributable, including the recipient(s) who are engaged in making  exempt supply, or are otherwise not registered for any reason, shall be the amount ‘C1’, to be calculated by applying the following formula-

C1=(t1/T) x C

Where,

‘C’ is the amount of credit to be distributed;

‘t1’ is the turnover, as referred to in section 20, of person R1 during the relevant period; and

‘T’ is the aggregate of turnover, during the relevant period, of all recipients to whom the input services is attributable in accordance with the provisions of section 20.

Person liable for registration

Section 22 prescribes the persons liable for registration.  Section 22(1) provides that every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakhs rupees.  Where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.

The explanation to this section provides that the expression ‘aggregate turnover’ shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals.

Audit

Rule 80(3) provides that every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under section 35(5) and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified in Form GSTR – 9C, electronically through common portal either directly or through a Facilitation Centre notified by the Commissioner.

GSTR 1

GSTR – 1 is the return to be filed every month in which the details of outward supplies of goods or services are to be furnished.  In sl. No. 3 the following information is to be furnished-

3(a) – Aggregate turnover in the preceding financial year;

3(b) – Aggregate turnover  - April to June 2017 (for July month).

GSTR  4

GSTR 4 – is the return to be filed every quarterly by the persons who opt for composition levy under section10.  In sl. No. 3 the following information is to be furnished-

3(a) – Aggregate turnover in the preceding financial year;

3(b) – Aggregate turnover  - April to Sep 2017 (for I Quarter).

 

By: Mr. M. GOVINDARAJAN - September 25, 2017

 

 

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