How to calculate aggregate turnover for GST registration

In this article, we will discuss the meaning of aggregate turnover as per GST law. Before getting into the definition and things that are included in it or excluded out of it, let us discuss why aggregate turnover is so important under GST law.

As per the GST law, if a person is liable to get registered, then such taxable person should obtain registration in every State from where he makes a taxable supply of goods or services or both.

If your case or supply is coming under compulsory registration criteria then irrespective of your aggregate turnover, you are required to get registration under GST law. Or else, you need to go through the aggregate turnover criteria as per GST law to know whether your business is required to get registered or not.

gst aggregate turnover

Aggregate turnover criteria for GST registration

As per GST law, every supplier whose aggregate turnover in a financial year exceeds 40 lakhs/ 20 Lakhs rupees (in the case of special category States the limit is 10 Lakhs rupees) shall be liable to be registered in the State or Union territory, from where he makes a taxable supply of goods or services or both.

To know the threshold limit applicable for GST registration, you are requested to refer our earlier article “How to get GST Registration in India – A Step-By-Step guide“.

Special category states as specified in sub-clause (g) of clause (4) of Article 279A of the Constitution are Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.

However, as per explanation (iii) to section 22, for the purpose of registration only Tripura, Mizoram, Manipur and Nagaland are to be treated as special category states. Therefore, to these four special category of states (i.e. Tripura, Mizoram, Manipur and Nagaland) the aggregate turnover limit is Rs 10 lakhs instead of Rs 20 lakhs. To other special category states as per article 279A(4)(g), aggregate turnover threshold limit should be Rs 20 lakhs.

States or Union Territories Threshold limit when supplier exclusively supply goods

 

(Amount in rupees)

Threshold limit when supplier engaged in supply of service or both goods and services

 

(Amount in rupees)

Manipur 10,00,000 10,00,000
Mizoram 10,00,000 10,00,000
Nagaland 10,00,000 10,00,000
Tripura 10,00,000 10,00,000
Puducherry 20,00,000 20,00,000
Telengana 20,00,000 20,00,000
Arunachal Pradesh 20,00,000 20,00,000
Meghalaya 20,00,000 20,00,000
Sikkim 20,00,000 20,00,000
Uttarakhand 20,00,000 20,00,000
Jammu and Kashmir 40,00,000 20,00,000
Assam 40,00,000 20,00,000
Himachal Pradesh 40,00,000 20,00,000
Others States (Karnataka, Andhra Pradesh, Kerala, Maharashtra, Delhi, Odisha, Bihar, Uttar Pradesh, Punjab, Haryana, Gujarat, Madhya Pradesh, Rajasthan, West Bengal, Tamilnadu etc..) 40,00,000 20,00,000

Now we know why aggregate turnover criteria are so important.

Let us look into the definition of aggregate turnover under GST law to know what are the things included in it or excluded out of it.

What is Aggregate Turnover under GST Law

As per GST law, aggregate turnover includes all taxable supplies, exempt supplies, export of goods or services or both and inter-state supplies of a person having the same PAN, to be computed on all India basis and excludes;

  • CGST,
  • SGST,
  • IGST,
  • UGGST, and
  • cess.

This means, for calculating the above threshold limit, the aggregate turnover shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals.

Please remember that the aggregate turnover criteria have to be determined based on Permanent Account Number (PAN). This means if a person has 4 branches in different states, turnover of all branches will be considered to calculate aggregate turnover as it’s to be calculated based on the person’s Permanent Account Number (PAN) issued by the tax department.

However, Aggregate turnover does not include the value of inward supplies on which tax is payable on reverse charge basis.

In the case of a registered job worker, the supply of goods, after completion of job-work, shall be treated as the supply of goods by the principal, and the value of such goods shall not be included in the aggregate turnover of the registered job worker.

This means if the Job worker is registered then only the supply made by him on behalf of his principal shall not be considered for computing his aggregate turnover.

What aggregate turnover includes

What aggregate turnover excludes

Taxable supplies

Central goods and Services Tax (CGST)

Exempt supplies

State goods and services tax (SGST)

Exports

Union territory Goods and Services Tax (UTGST)

Inter-state supplies

Compensation Cess

 

Value of inward supplies on which tax is payable under reverse charge

** Aggregate turnover should be calculated for a single PAN on all India basis.

An example calculating aggregate turnover:-

Let us understand the calculation of aggregate turnover with an illustration.

XYZ private Ltd. is a manufacturing unit in Chennai, Tamilnadu. They also have service units located in Coimbatore and Delhi. Additional details are furnished in the table below:

Business Unit of Location PAN Number Turnover (Rs)
XYZ private Ltd. Chennai AAACS1242M 15 Lakhs
XYZ private Ltd. Coimbatore AAACS1242M 2 Lakhs
XYZ private Ltd. Delhi AAACS1242M 5 Lakhs

As per the example,

In the case of XYZ private limited, turnover of all the 3 units located in Chennai, Coimbatore and Delhi will be added together to consider whether XYZ is liable to register for GST or not. Therefore, the aggregate turnover will be Rs 22 Lakh (5 Lakh + 2 Lakh + 15 Lakh) and are required to get registered under GST.

Aggregate turnover is a crucial parameter under GST law to find out when a person is liable for GST registration, when a person is eligible for composition scheme and when a person can opt to pay tax at concessional rate under notification number 2/2019.

is a fellow member of the Institute of Chartered Accountants of India. He lives in Bhubaneswar, India. He writes about personal finance, income tax, goods and services tax (GST), company law and other topics on finance. Follow him on facebook or instagram or twitter.