Aggregate Turnover

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Aggregate Turnover 2017-04-14T00:02:01+00:00
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    #966 |

    “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 excludes central tax, State tax, Union territory tax, integrated tax and cess;

    Priya MadrechaPriya Madrecha
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    The phrase “aggregate turnover” is widely used under the GST laws. Aggregate Turnover is an all-encompassing term covering all the supplies effected by a person having the same PAN. It specifically excludes:
    • Inward supplies effected by a person which are liable to tax under reverse charge mechanism, However, it is not to be understood that the value of such inward supplies is to be reduced from the value of outward supplies to arrive at aggregate turnover; and  • Various taxes under the GST law, Compensation cess.
    There is a certain amount of ambiguity as to whether the value of inward supplies would form part of ‘aggregate turnover’ since the definition covers all taxable supplies and excludes only inward supplies to the extent liable to tax under reverse charge mechanism.
    The different kinds of supplies covered are:
    (a)     Taxable supplies; (b)     Exempt Supplies:
    •    supplies that have a ‘NIL’ rate of tax;
    •    supplies that are wholly exempted from UTGST, CGST or IGST; and
    •    supplies that are not taxable under the Act (alcoholic liquor for human consumption);
    (c)     Export of goods or services or both, including zero-rated supplies.
    The following aspects among others need to be noted:
    •    Aggregate turnover is relevant to a person to determine:
    o Threshold limit to opt for composition scheme: Rs. 50 Lakhs in a financial year; o Threshold limit to obtain registration under the Act: 20 Lakhs (or 10 Lakhs in case of supplies effected from Special Category States, as explained in our analysis on Section 22) in a financial year.
    •    Inter-State supplies between units of a person with the same PAN will also form part of aggregate turnover.
    •    For an agent, the supplies made by him on behalf of all his principals would have to be considered while analysing the threshold limits.
    •    For a job-worker, the following supplies effected on completion of job work would not be included in his ‘aggregate turnover’:
    •    Goods returned to the principal
    •    Goods sent to another job worker on the instruction of the principal
    •    Goods directly supplied from the job worker’s premises (by the principal): It would be included in the ‘aggregate turnover’ of the principal.

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