Aggregate Turnover under Section 2(6) of CGST Act Definition
Aggregate
Turnover under Section 2(6) of CGST Act
Definition
Aggregate Turnover is the total value of all supplies made by a person during
a financial year. It includes both taxable and exempt supplies.
Calculation
Aggregate turnover is calculated on
an All-India basis for entities with the same Permanent Account Number
(PAN). This means that the turnover from all business locations using the same
PAN is added together to determine the aggregate turnover.
Components
of Aggregate Turnover
- Taxable Supplies:
These are supplies on which GST is levied.
- Exempt Supplies:
These are supplies that are not subject to GST.
- Exports:
These are supplies made to a recipient located outside India.
- Interstate Supplies:
These are supplies made from one state to another within India.
Exclusions
from Aggregate Turnover
- Central Tax, State Tax, Union Territory Tax, Integrated
Tax, and Cess: These taxes are not included
in the calculation of aggregate turnover.
- Inward Supplies on Reverse Charge: These are supplies where the recipient is liable to
pay GST.
Example
Suppose a company has two branches,
one in Delhi and the other in Mumbai, both using the same PAN.
- Delhi branch has taxable supplies of Rs. 10 lakhs and
exempt supplies of Rs. 2 lakhs.
- Mumbai branch has taxable supplies of Rs. 8 lakhs and
exempt supplies of Rs. 1 lakh.
The aggregate turnover of the
company will be:
- Delhi branch: Taxable supplies (Rs. 10 lakhs) + Exempt
supplies (Rs. 2 lakhs) = Rs. 12 lakhs
- Mumbai branch: Taxable supplies (Rs. 8 lakhs) + Exempt
supplies (Rs. 1 lakh) = Rs. 9 lakhs
- Aggregate Turnover:
Rs. 12 lakhs + Rs. 9 lakhs = Rs. 21 lakhs
Importance
of Aggregate Turnover
- GST Registration:
Determining the eligibility for GST registration based on the threshold
limit.
- Composition Scheme:
Deciding whether a business can opt for the composition scheme.
- Input Tax Credit (ITC): Calculating the eligibility for ITC in certain cases.
- Other GST Provisions:
The aggregate turnover is used for various other GST provisions and
calculations.