Aggregate Turnover in GST: How’s It Related to Your Business?

While running a business, you deal with a dozen of business-specific jargon and metrics as you go through every single day. Together, they all go a long way towards helping you track the success of the business. While GST return filing, online payments, and direct taxes are quite popular buzzwords, there is aggregate turnover as well. 

Aggregate turnover is one of the most important business metrics but is also the most misunderstood one. It reflects total sales and is a measure of business performance. 

In this complete guide, we will take you through various sides of aggregate turnover and how it is related to GST registration.

What do you mean by annual aggregate turnover?

As defined under GST law, aggregate turnover refers to the aggregate value of all taxable supplies (not including the value of inward supplies over which tax is payable by an individual on a reverse charge basis), exports of goods and services, exempt supplies, and inter-state supplies of persons having the same PAN, to be computed on Pan India basis, but not including State tax, Union territory tax, Central tax, Integrated tax, and cess. 

Based on this definition, the aggregate turnover that is computed for a specific financial year starting from the month of April to the March of the next year is called annual aggregate turnover. In simple words, it is the total turnover that is calculated at a PAN  level and with all GSTINs put together being a sum of the following parameters:

• Exempt sales value
• Taxable sales value
• Export of goods and services
• Interstate supplies by your business to the sister concern under the same PAN 
• Interstate stock transfer or supplies between unique persons under the same PAN

Here, the above sum excludes different tax components, such as State tax, Central tax, etc. Besides this, the taxable value does not include the purchases where the individual has to pay tax under reverse charge. Here, it is imperative to note that the sales subject to reverse charge do form a part of the taxable supplies in the aggregate turnover.

You should also know that aggregate turnover is not the same as the turnover in a State. The former is used to determine the threshold limit for registration and eligibility for the Composition scheme.

How is turnover in the States different from aggregate turnover?

Aggregate turnover is quite different from turnover in the State. As per its definition, it refers to the aggregate value of all non-taxable and taxable supplies. This includes exempt supplies and export of goods or/and services within a state by a taxable individual and inter-state supplies of goods or/and services made from the State by that individual excluding tax (as charged under the SGST Act, CGST Act, and IGST Act) if any.

You can also consider the turnover for a specific GSTIN at the state level to include any interstate supplies undertaken via that GSTIN.

Understanding aggregate turnover with an example

The following example will help you understand what aggregate turnover is –

Mr. Shukla is in the business of selling tea leaves grown in his tea estate which has an annual turnover of Rs. 1.5 crore (an activity that is exempt from GST). Besides this, he also sells packaging bags with his leaves and adds the packaging bag charge separately to the bill. In addition to the leaf-selling business, his turnover from selling packaging bags is Rs. 4 lakh, which is chargeable to GST. In other words, the total taxable turnover is Rs. 4 lakh only. 

As per the definition of aggregate turnover detailed above, Mr. Shukla has to register under GST as the aggregate turnover is higher than the threshold limit (explained below).

More about GST registration threshold

As per law, if your business has an aggregate turnover of more than Rs. 20 lakh (or Rs. 40 lakh being a supplier of goods) in a financial year, it is mandatory for you to register under the GST regime. However, this threshold limit is comparatively lower for Indian states that are flagged as special category states. 

List of Special Category states under GST

• Assam
• Arunachal Pradesh
• Manipur 
• Jammu & Kashmir
• Mizoram
• Meghalaya
• Sikkim
• Nagaland
• Tripura
• Uttarakhand
• Himachal Pradesh

The threshold limit of aggregate turnover in all these states is Rs. 10 lakh. Here’s an example to help you understand this limit better –

Mr. Dheeren, a farmer from Manipur runs a farming business that has a turnover of Rs. 15 Lakh. He also has a non-agricultural business that has a taxable turnover of Rs. 1,00,000. Here, Mr. Dheeren still needs to register under GST as his aggregate turnover is higher than the threshold limit for special category states. 

Increase in the aggregate turnover threshold – Is it possible?

At a request of a State falling in the special category, the Government may increase the threshold for aggregate turnover from Rs. 10 lakh to a number not exceeding Rs. 20 lakh, subject to conditions and limitations prescribed in the CGST Amendment Act, 2018. 

As of January 2019, the threshold limit of different special states has been changed as defined in the table below:

Aggregator turnover reference under GST law

FAQs

What is aggregator turnover vs. turnover in a state?

While aggregator turnover is used to calculate threshold limit and composition scheme, the turnover in a state aids in calculating Composition levy. 

How is aggregator turnover used for GST purposes?

If a business has an aggregate turnover of more than Rs. 20 lakh in a financial year (except in the case of Special category states), it is mandatory for the business owner to register under GST law. 

How to calculate aggregate turnover for GST registration?

The simplest way to calculate aggregate turnover is to follow its definition as defined under the GST law (given above). In short, it is the aggregate value of taxable supplies, exempt supplies, exports, and inter-state supplies. 

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