How to Calculate Aggregate Turnover for GST Registration In India?

The term aggregate turnover as defined under the section 2(6) of the CGST Act has been analyzed as follows:

Aggregate turnover includes value of all outward supplies i.e., taxable supplies, exempt supplies, exports, inter-state supplies of persons having the same PAN to be computed on all India basis, but excludes all the CGST, SGST, UTGST, IGST, Compensation Cess and value of all inward supplies on which tax is payable on reverse charge basis.

**NOTE: -**Aggregate turnover of the supplier would include the outward supplies taxable under reverse charge.

A. Aggregate turnover to include total turnover of all branches with the same PAN.

For example: - A dealer has two offices- one in Delhi and another in Punjab. So, in order to determine whether the dealer is liable for registration, turnover of both the offices would be taken into account and only if the same exceeds Rs. 40 lakhs then only the dealer would be liable for registration.

NOTE: - If a person with place of business in different states across India has one branch in a Special Category State, the threshold limit for GST registration will be reduced to 20 lakhs.

B. Value of exported goods/service, exempted goods/ services, inter-state supplies between distinct persons having same PAN is to be included in aggregate turnover.

For example: - Sandip oils, in Punjab is engaged in supplying machine oil as well as petrol etc. supply of petrol is not leviable to GST but supply of machine oil is taxable under GST. In order to determine whether Sandip is liable for registration, turnover of both taxable as well as non-taxable supplies would be taken into account and if the same exceeds Rs. 40 lakh, Sandip oils is liable for registration.

C. Aggregate turnover to include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals.

For example: - Mohini enterprises has appointed M/s Best fords & Associates as its agent. All the supplies of goods made by M/s Best fords & Associates as agent of Mohini Enterprises will also be included in the aggregate turnover of M/s Best fords & Associates.

D. ‘Aggregate turnover’ Vs. ‘Turnover in a State’: - The aggregate turnover is different from turnover in a State. The former is used for determining the threshold limit for registration as well as eligibility for composition scheme. However, the amount payable under composition levy would be calculated on the basis of ‘turnover in the state/UT’.

Turnover limit for GST Registration

• Every supplier of goods or services or both is required to obtain registration.
• In the State or the Union territory from where he makes the taxable supply.
• If his aggregate turnover exceeds Rs. 40 lakhs in a Financial Year.

However, the limit of Rs. 40 lakhs will be reduced to Rs 20 lakh if the person is carrying out business in Special Category States except Jammu and Kashmir, i.e., limit Rs. 20 lakhs are applicable for states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.

If required, can I file GST on my own:

Yes, every person registered under GST has to file returns periodically but before filing such returns payment of due taxes, if any; is compulsory otherwise returns cannot be submitted.

Steps for filing GST Returns:

GST returns can be filed easily. Returns applicable for normal taxpayers and their due dates are as follows:

• Monthly details of outward supplies are to be filled in form GSTR-1 by the 10th of next month.
• Monthly details of Inward supplies are to be filled in form GSTR-2 by the 15th of next month. (Presently this is not activated by GST department rather auto prefilled GSTR-2A made available to every taxpayer)
• Monthly return filing along with due taxes is to be filled in form GSTR-3 by the 20th of next month. (Presently short return as GSTR-3B made available to capture summarised details of outward and inward liability along with payment of taxes)
• Annual return is to be filled in form GSTR-9 by 31st December following financial year.

How is GST calculated

GST is calculated easily using the following formula:
Add GST amount = (original cost *GST%)/100
Net price = original cost + GST amount
Remove GST : GST Amount = Original Cost-[original cost *{100/( 100+GST%)}] Net price= original cost -GST amount.
For example:- suppose a product is sold for Rs. 2000 and the GST rate applicable to it is 12% then net price of the product will be Rs. 2000 + 12% of 2000 = Rs 2000+240 =Rs. 2240.

Is GST calculated on profit?

No, GST is not calculated on profit instead it is levied on value additions only. Value addition is the addition you make to the value of the product as compared to the value of the product when it is purchased . if one person is engaged in business of manufacturing then value addition is the cost of material, labour and overheads that is utilized and the profit that is earned. On the other hand if any person is engaged in business of trading only then value addition would be their profit. However we can say that GST is not on profit it is on our entire revenue. (Income tax is on our profit).

For example:- if the revenue is Rs. 100000/- and GST rate is 18% then GST amount = 100000* 18% = Rs. 18000. However, taxpayer also eligible to take input credit on purchased of taxable inward supplies as well and he needs to deposit only excess amount, i.e., on value additions only. Suppose in above example, if taxpayer used raw material of Rs. 60,000/- carrying 18% GST, i.e., Rs. 10,800/- paid to vendor (total Rs. 70,800). He should be elgible to take input credit of Rs. 10,800 and accordingly, he need to pay Rs. 18000 less Rs. 10800= Rs. 7200 only to government while he filing GSTR 3B. So GST of Rs. 7200 virtually becomes GST on value addition.

Impact of GST on product pricing:

Indirect tax is levied by the central and state government as CGST and SGST respectively. In case of intra-state transactions, the seller will collect CGST and SGST from the buyer and it is paid to the central and state governments respectively. However in case of Inter-state sale, IGST is charged and paid to central government, which is distributed to states in some proportion decided by central government.

Following is an example of Impact of GST on product pricing :

Example: price of a product sold from Pune to Mumbai (intra state) = Rs. 1000. CGST @ 5% = Rs. 50 + SGST @ 5% = Rs. 50. Hence cost of product sold from pune to Mumbai = Rs.1100.
Value addition and Profit for Mumbai Buyer = Rs. 1000.
Selling price to Bhopal Buyer= Rs.2100.
IGST @10% = Rs. 210. So total cost of the product for bhopal = Rs. 2310.

Who pays GST buyer or seller?

Goods and Service Tax is paid by the buyer that is customers to the seller for the product and services he purchases. However Seller later remits the GST to the government by adjusting that amount which is paid by him at the time of first purchase. GST is already included in the final price of the product that is to be paid by the customer and then it is passed on to the government by the seller. This single tax rate is applied to the whole of the country for similar kind of goods and services. The main objective behind implementing GST is to eliminate the system of double taxation(Tax on Tax) that is prevailing before GST and to uniform the tax methods in all accross the country.