As we have discussed in earlier GST updates that
registration under GST regime is required only if the turnover of the assessee
crosses the threshold limit of Rs twenty lakhs. Today
in this update we shall analyse the definition of "aggregate
turnover" and changes brought in by Revised GST Draft
Law.
The definition of aggregate turnover under revised GST
Draft Law is under section 2(6) which states that the aggregate turnover shall
include all taxable supplies, exempt supplies, exports of goods
and/or services and inter-State supplies of a person having the same PAN. The
turnover is to be computed on all India basis and it shall exclude taxes,
charged under the CGST Act, SGST Act and the IGST Act. Further an explanation
has been provided which states that payments made under reverse charge mechanism
shall not be included in computation of aggregate turnover.
The definition visibly states that while computing aggregate turnover
the assessee shall have to include exempted turnover also. By this government
aims to bring major chunk of suppliers under ambit of tax as now even though the
supplier supplies majorly exempted goods but a small portion of taxable goods
and crosses the threshold, he shall have to get registered and pay taxes under
GST.
The major changes bought 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 ;
Hence the delight was short lived as non taxable supplies has been
included in definition of exempted supplies and thus still remains the element
of this definition indirectly.
2.
Interstate 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.
When this provision in old GST law came then everyone was of the view
that assessee has to pay the GST even for single transaction of interstate
supply. After registration, he has to pay the tax on each supply. This
interpretation came from the concept of voluntary registration.
But inclusion of interstate supply in definition of "aggregate
turnover" together with registration requirement with schedule V leads to two
interpretations viz:-
a. The single transaction interstate supply will be liable to tax and
registration is to be taken for the same. But exemption of Rs. 20 lakh will be
separately allowed for intra state supply. But the turnover of interstate supply
will also be covered under "aggregate turnover".
b. The interstate supply will also be eligible for threshold exemption
of Rs. 20 Lakh but the person has to get registration and file returns. But his
liability will not start as soon as he get registered.
But we have to study these interpretations in light of the revised GST provisions and views from citizens are invited for the same.
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