Turnover in State or turnover in Union territory under composition levy - GST Ready Reckoner - GST

Turnover in State or turnover in Union territory under composition levy [Section 2(112) read with explanation 2 to section 10] As per section 2(112), turnover in State/ turnover in Union territory 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) 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 by the said taxable person but excludes central tax, State tax, Union territory tax, integrated tax and cess. As per explanation 2 to section 10 clarifies that for the purposes of determining the tax payable by a person under this section, the expression turnover in State or turnover in Union territory shall not include the value of following supplies, namely: (i) supplies from 1st April of a FY up to the date when such person becomes liable for registration under this Act; and (ii) exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount. Example :- A civil contractor of Mr. Rahul has commenced providing construction services to in Delhi from April this year. he wants to opt composition scheme. His turnover for various quarters till December is as follows: Period Turnover ( In Rs. ) April-June 20 lakh July-Sept 30 lakh Oct-Dec 20 lakh In the given case, since has started the supply of services in the current financial year, his aggregate turnover in the preceding financial year is Nil. whether he have turnover in the previous year upto 50 lakhs then he is eligible to opt composition during the financial year Consequently, in the current FY, he is eligible for composition scheme for services. He becomes eligible for the registration when his aggregate turnover exceeds Rs. 20 lakh. While registering under GST, he opts for composition scheme for services. For determining his turnover of the State for payment of tax under composition scheme for services, turnover of April-June quarter [ Rs. 20 lakh] shall be excluded as the value of supplies from the first day of April of a financial year up to the date when such person becomes liable for registration under this Act are to be excluded for this purpose. On next Rs. 30 lakh [turnover of July-Sept quarter], he shall pay tax @ 6% [3% CGST and 3% SGST], i.e. CGST Rs. 90,000 and SGST Rs. 90,000. By the end of July-Sept quarter, his aggregate turnover reaches Rs. 50 lakh. Consequently, his option to avail composition scheme for services shall lapse by the end of July-Sept quarter and thereafter, he is required to pay tax at the normal rate of 18%. Thus, the tax payable for Oct-Dec quarter is Rs. 20 lakh 18%, i.e. Rs 3,60,000. while computing aggregate turnover for determining Mr. Rahul eligibility to pay tax under composition scheme, value of supplies from the first day of April of a financial year up to the date when such person becomes liable for registration under this Act (i.e. turnover of April-June quarter), are included.