Gst Turnover Limit

The Central Government has decided to provide two threshold limit for

GST registration for suppliers of goods, Rs.20 lakhs and Rs.40 lakhs. However, each of the individual State Governments must decide on the threshold limit within a week as the State's revenue is also tied to GST. This decision will now lead to various States having different GST threshold limits overtime. Service providers will continue to be required to register for GST once they cross a turnover of Rs.20 lakhs and in case of Special Category States at Rs 10 lakhs.

Calculating GST Turnover

Aggregate turnover is an important term that determines

GST registration requirement. Turnover, in common parlance, means value of a business over a period of time. Aggregate turnover in GST can be described as the taxable value of supplies of goods and services, exempt supplies of goods and services, export of goods and services and inter-state supplies. Hence, aggregate turnover for GST includes supplies of goods or services, supplies exempt from GST and exports.

Purpose of Aggregate Turnover

The basic pre-requisite for registration in GST is the aggregate turnover. The laws of GST states that any turnover up to 20 lakhs is completely exempted from GST, 10 lakhs for special category states except the state of “Jammu and Kashmir”, which is fully exempted from registration, while anything above these values are subject to registration. The aggregate turnover is calculated by taking together the value in respect of the activities carried by all the entities of the concerned person on a pan- India basis.

Special Category States

Eleven states are conferred with the status of special category, as prescribed by the Government. These are:

Arunachal Pradesh
Assam
Jammu and Kashmir(Fully exempted)
Manipur
Mehalaya
Mizoram
Nagaland
Sikkim
Tripura
Himachal Pradesh
Uttarakhand

How to calculate Aggregate Turnover?

Aggregate turnover can be calculated as follows: Value of all (taxable supplies+Exempt supplies+Exports+Inter-state supplies) – (Taxes+Value of inward supplies+Value of supplies taxable under reverse charge + Value of non-taxable supplies) of a person having the same PAN(Permanent Account Number) across all his business entities in India.

Which is not inclusive?

The below given charges must be excluded while calculating aggregate turnover:

Taxes with respect to CGST, SGST or IGST Acts
Value of taxes payable on reverse charge mechanism
Value of inward supplies of goods and services
Value of Non-taxable supplies of goods or services like Alcohol, Petrol etc.

Difference between Aggregate Turnover and Turnover in a State

Aggregate turnover helps in calculating the threshold limit and composition scheme, while the turnover of a state is used in calculating Composition levy.

Back to Learn

Frequently Asked Questions

Common questions about GST Turnover Limit & Registration Requirements in India.

The purpose of having different GST turnover limits for goods and services is to provide relief to small businesses and traders in the goods sector. By allowing a higher turnover limit of Rs. 40 lakhs for goods, more small businesses can be exempted from GST registration, reducing their compliance burden. Services, on the other hand, have a lower turnover limit of Rs. 20 lakhs for GST registration.

The aggregate turnover is a crucial factor in determining whether a business needs to register for GST. If the aggregate turnover of a business, calculated across all its entities in India, exceeds the prescribed threshold limit, it becomes mandatory for the business to register for GST. This threshold limit is Rs. 20 lakhs for most states and Rs. 10 lakhs for special category states, except for Jammu and Kashmir, which is fully exempted.

Aggregate turnover is a key term in GST that refers to the combined value of all taxable supplies, exempt supplies, exports, and inter-state supplies made by a person or business across all their entities in India. It helps determine eligibility for GST registration, composition scheme, and other compliance requirements.

The aggregate turnover is calculated by taking the sum of the value of all taxable supplies, exempt supplies, exports, and inter-state supplies made by a person or business across all their entities in India, and then subtracting the value of inward supplies, non-taxable supplies, taxes paid under reverse charge mechanism, and other deductions as per the GST laws.

While calculating the aggregate turnover for GST, certain items are excluded, such as the value of taxes paid under CGST, SGST, or IGST Acts, the value of inward supplies, the value of non-taxable supplies (like alcohol, petrol, etc.), and the value of supplies taxable under the reverse charge mechanism.

Aggregate turnover is calculated across all entities of a business in India and is used to determine the threshold limit for GST registration and eligibility for the composition scheme. On the other hand, turnover in a state is used to calculate the composition levy, which is a simplified tax compliance scheme for small businesses.

Special category states, such as Arunachal Pradesh, Assam, Manipur, and others, are given a lower GST turnover limit of Rs. 10 lakhs (except for Jammu and Kashmir, which is fully exempted) to provide relief and support to small businesses in these economically disadvantaged regions. This lower threshold aims to promote economic development and ease the compliance burden on small enterprises in these states.

The decision by states to have different GST turnover limits for goods can potentially create complexities for businesses operating across multiple states. They may need to comply with varying registration requirements and thresholds, leading to increased compliance costs and administrative challenges, especially for small and medium-sized enterprises.

Yes, the GST turnover limits for goods and services can be revised in the future by the Central Government and State Governments, respectively. These limits are subject to periodic review and can be adjusted based on various factors, such as economic conditions, ease of doing business considerations, and the need to support small businesses.

The turnover limit in GST is specifically tailored to determine the registration requirement and eligibility for the composition scheme under the GST regime. It differs from turnover limits in other tax regimes, such as income tax or VAT, which may have different thresholds and calculations based on their respective laws and regulations.