"Aggregate turnover" for the purpose of migration to GST

 

The CBEC has clarified that for the purpose of migration to GST, the "aggregate turnover" as per Section 2(6) of the REVISED DRAFT MODEL GST LAW (November 2016) may be taken into account.

 

The Section 2(6) of the Revised Draft Model GST Law reads as,

 

(6) “aggregate turnover” means the aggregate value of all taxable supplies, exempt supplies, exports of goods and/or services and inter-State supplies of a person having the same PAN, to be computed on all India basis and excludes taxes, if any, charged under the CGST Act, SGST Act and the IGST Act, as the case may be;

 

Explanation.- Aggregate turnover does not include the value of inward supplies on which tax is payable by a person on reverse charge basis under sub-section (3) of Section 8 and the value of inward supplies.

 

As per this section, the aggregate turnover in­cludes the aggregate value of:

 

(i) all taxable and non-taxable supplies, including inter-state supplies

(ii) exempt supplies, and

(iii) exports of goods and/or service of a person having the same PAN.

 

The above shall be computed on all India basis and ex­cludes taxes charged under the CGST Act, SGST Act and the IGST Act.

 

Aggregate turnover does not include value of supplies on which tax is levied on reverse charge basis, and value of inward supplies.

 

In the Revised Draft Model GST Law, the major changes brought in this definition are:-

 

1. The removal of ‘non taxable supplies’ from the definition. Under old GST law, this was also included in the definition.  It was thought to be a welcoming change on government’s behalf as already the threshold limit given is too less and then including non taxable supplies along with exempted supplies further narrows the threshold limit. But the definition of "exempt supply" is given under Section 2(44) of revised GST Act which reads as follows:-

 

“exempt supply” means supply of any goods and/or services which are not taxable under this Act and includes such supply of goods and/or services which attract nil rate of tax or which may be exempt from tax under section 11 ;

 

2. Inter-state supplies have also been now explicitly mentioned and included in the computation which earlier was not direct part of the definition. But the earlier definition in old draft GST law does not included interstate supply. This means that the person was eligible of threshold exemption for interstate supply upto Rs. 20 Lakh. However, the Schedule V of revised GST law says in point number 6(i) that person making interstate supply without threshold exemption limit has to register himself. It implies that person has to pay the tax on interstate supply even on single transaction.

[VIL Editorial]