What is Aggregate Turnover

Now, since we understand how the Composition Scheme works, let us look at another concept introduced in GST which is closely associated with Composition Scheme. This is called ‘Aggregate Turnover’ and we will look at in detail

The law says that “aggregate turnover” means the aggregate value of all taxable supplies, excluding the value of inward supplies on which tax is payable by a person on reverse charge basis, exempt supplies, exports of goods or services or both and inter-state supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes Central tax, State tax, Union territory tax, Integrated tax and cess.

For Normal Category States under GST

Here’s an example to help you understand the concept of aggregate turnover. So Mr. A is a farmer with an annual turnover of INR 55 lakh. Since this income is agriculture-related, the turnover is exempt from GST. However, Mr. A also supplies plastic bags along with his crop and charges separately for this. His turnover from the sale of plastic bags is INR 1 lakh and we know that this transaction (sale of plastic bags) is chargeable to GST. In simple words, his taxable turnover is only INR 1 lakh. Going by the definition of aggregate turnover, Mr. A is required to register under GST because his aggregate turnover exceeds the threshold limit of INR 20 lakh. Further, Mr. A does not have the option to register as a composition dealer because this aggregate turnover exceeds the threshold limit of INR 50 lakh.