Turnover limit for Gst Registration whether 40Lakh/20 Lakh/10 Lakh

Turnover Limit for Registration under GST

Every supplier shall be liable to obtain Registration in the State or the Union territory from where he makes the taxable supply if his aggregate turnover exceeds following limits in a FY:-

In case of supply from Manipur, Nagaland, Tripura & Mizoram

Rs.10 lakh for goods or services and both

In case of supply from Arunachal Pradesh, Meghalaya, Sikkim, Uttarakhand, Puducherry and Telangana

Rs. 20 lakh for goods or services and both

In case of supply from Jammu and Kashmir, Assam, Himachal Pradesh and all other states

(i)Rs. 20 lakh for services or goods & Services both

(ii) Rs. 40 lakh for Exclusively intra-State supply of goods only

(Note:- Limit of Rs. 40 Lakhs will not be applicable if persons engaged in making supplies of ice cream and other edible ice, whether or not containing cocoa Pan masala and all goods of Chapter 24, i.e. Tobacco and manufactured tobacco substitutes.)

Example1 Prithiviraj of Assam is exclusively engaged in intra-State supply of shoes. His aggregate turnover in the current financial year is Rs. 22 lakh. In view of the discussion in the above paras, the applicable threshold limit for registration for Prithviraj in the given case is Rs. 40 lakh. Thus, he is not liable to get registered under GST.

If in above example, all other things remaining the same, Prithiviraj is exclusively engaged in supply of pan masala instead of shoes, he will not be eligible for higher threshold limit of Rs. 40 lakh and the applicable threshold limit for registration in that given case will be Rs. 20 lakh. Thus, Prithiviraj will be liable to get registered under GST.

If instead of pan masala, Prithiviraj is exclusively engaged in supply of taxable services, the applicable threshold limit for registration will still be Rs. 20 lakh. Thus, Prithiviraj will be liable to get registered under GST.

Example 2 Shivaji of Telangana is exclusively engaged in intra-State supply of toys. Its aggregate turnover in the current financial year is Rs. 22 lakh. Since Shivaji is making taxable supplies from Telangana, he will not be eligible for higher threshold limit available in case of exclusive supply of goods. The applicable threshold limit for registration for Shivaji in the given case is Rs. 20 lakh. Thus, he is liable to get registered under GST.

If in above example, all other things remaining the same, Shivaji is exclusively engaged in supply of taxable services instead of toys, the applicable threshold limit for registration will still be Rs. 20 lakh. Thus, Shivaji will be liable to get registered under GST.

Further, if Shivaji is engaged in supply of both taxable goods and services, the applicable threshold limit for registration will be Rs. 20 lakh only. Thus, Shivaji will be liable to get registered under GST.

Example 3 Ashoka of Manipur is exclusively engaged in intra-State supply of paper. Its aggregate turnover in the current financial year is Rs. 12 lakh. Since Ashoka is making taxable supplies from Manipur which is

a Special Category State, the applicable threshold limit for registration for Ashoka in the given case is Rs. 10 lakh. Thus, he is liable to get registered under GST.

If in above example, all other things remaining the same, Ashoka is exclusively engaged in supply of taxable services instead of toys, the applicable threshold limit for registration will still be Rs. 10 lakh. Thus, Ashoka will be liable to get registered under GST.

Further, if Ashoka is engaged in supply of both taxable goods and services, the applicable threshold limit for registration in that given case will be Rs. 10 lakh only. Thus, Ashoka will be liable to get registered under GST.

Author’s Comment-1 If business operation in more than one category of states, Lower threshold limit will prevail for calculation of aggregate turnover under GST.

Example – Raghav of Assam is exclusively engaged in intra-State supply of readymade garments. Its turnover in the current FY from Assam showroom is Rs. 28 lakh. It has another showroom in Tripura with a turnover of Rs. 11 lakh in the current FY. Since Raghav is engaged in supplying garments from a Tripura State, the applicable threshold limit for him gets reduced to Rs. 10 lakh. Further, Raghav is liable to get registered under GST in both Assam and Tripura on his aggregate turnover crossing the threshold limit of Rs. 10 lakh.

Author’s Comment-2 A person is required to obtain registration with respect to his each place of business in India from where a taxable supply has taken place. However, a supplier is not liable to obtain registration in a State/UT from where he makes an exempt/non-taxable supply.

Example – Uday Enterprises is engaged in supply of taxable goods in Maharashtra. It also supplies alcoholic liquor for human consumption from Nagaland. Its turnover in the current financial year is Rs. 34 lakh in Maharashtra and Rs. 8 lakh in Nagaland.

Since Uday Enterprises is exclusively engaged in making taxable supplies of goods from Maharashtra, the applicable threshold limit for obtaining registration is Rs. 40 lakh. However, the threshold limit will not be reduced to Rs. 10 lakh in this case, as supply of alcoholic liquor for human consumption from Nagaland (one of the Special Category States) are non-taxable supplies.

In the given case, since the aggregate turnover of Uday Enterprises exceeds the applicable threshold limit of Rs. 40 lakh, it is liable to obtain registration. It will obtain registration in Maharashtra, but is not required to obtain registration in Nagaland as he is not making any taxable supplies from said State.

As per Section 2(6) of CGST Act “Aggregate Turnover” include-

  • All Taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis)
  • Exempt Supplies:
  1. supplies that have a ‘NIL’ rate of tax;
  2. Supplies that are wholly exempted from SGST, UTGST, CGST, IGST or CESS; and
  3. supplies that are not taxable under the Act (alcoholic liquor for human Consumption, Petrol Etc.)
  • Export of goods or services or both, including zero-rated supplies.
  • Inter- State Supplies between units of a person with the same PAN

but aggregate turnover excludes various taxes under GST Law –

  • CGST
  • SGST
  • UTGST
  • IGST
  • GST Compensation Cess

Analysis of Aggregate Turnover

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

Example: Mr. C of Calicut is trading on his own goods and also acting as an agent of Mr. B of Bengaluru. Mr. C turnover in the financial year 2017-18 is Rs. 12 lacs in his own account and Rs. 9 lacs on behalf of principal. Whether Mr. C is liable to register compulsorily under GST law.

Answer: As per explanation 1 in computing the total turnover, both the value of supply on his own account that is Rs. 12 lacs and on behalf of principal Rs. 9 lacs will be aggregated. Hence, the aggregate turnover will be Rs. 21 lacs. Mr. C is liable to register compulsorily under the GST law.

  1. Exempt supply(i.e. nil rate or wholly exempt or non taxable supply) shall also be taken into consideration while calculation of Aggregate turnover.

Example: Harshit Oils, Punjab, is engaged in supplying machine oil as well as petrol. Supply of petrol is not leviable to GST, but supply of machine oil is taxable. In order to determine whether Madhur Oils is liable for registration, turnover of both non-taxable as well as taxable supplies would be taken into account and if the same exceeds the 20 lakhs, Harshit Oils is liable for registration.

  1. For calculations of “Aggregate Turnover”, all supplies made by branches under same permanent Account shall be taken.

Example:- A dealer ‘X’ has two offices – one in Delhi and another in Haryana. In order to determine whether ‘X’ is liable for registration, turnover of both the offices would be taken into account and only if the same exceeds Rs. 20 lakh, X is liable for registration.

  1. For the job-worker, the following Supply of goods after completion of jobwork would not be included in his “aggregate turnover”:
  • Goods returned to the principal
  • Goods sent to another job worker on the instruction of the principal
  • Goods directly supplied from the job worker’s premises without bringing it back to his own premises. (by the principal) [However, it may be included in the aggregate turnover of the principal]
  1. Aggregate turnover to exclude inward supplies on which tax is payable under reverse charge. However, Outward Supplies taxable under reverse charge would continue to be part of the ‘aggregate turnover’ of the supplier of such supplies.

Illustration :- With the help of following information in the case of M/s Garg Enterprises, Faridabad (Haryana) for the year 2017-18, determine the aggregate turnover for the purpose of registration under CGST Act, 2017

  1. Sale of diesel on which Sale Tax (VAT) is levied by Faridabad Government for Rs. 1,00,000/-
  2. Supply of goods, after completion of job work, from the place of Garg Enterprises directly by principal for Rs. 3,00,000/-
  3. Export of Supply to England (UK) for Rs. 5,00,000/-
  4. Supply to own additional place of business in Haryana for Rs. 5,00,000/-
  5. Outward supply on which GST is to be paid by receipent under reverse charge for Rs. 1,00,000/-

All the above amounts are excluding GST.

You are required to provide reasons for treatment of various items given above.

Solution:- Computation of Aggregate Turnover for the Purpose of Registration

Sale of diesel on which Sale Tax (VAT) is levied by Faridabad Government

[Reason- petroleum products are outside the the scope of GST hence it is non-taxable supply. Exempt supply includes non-taxable supply. Aggreagate turnover includes exempt supllies.]

1,00,000

Goods directly supplied from the jobworker’s premises (by the principal)

[Reason- Not includible in value of job worker viz. assessee; However, it would be incuded in the aggregate turnover of the principal]

Nil

Export of Supply to England (UK)

[Reason- Export supplies specifically included in aggregate turnover]

5,00,000

Supply to own additional place of business in Haryana

[Reason- Additional place of business does not make a separate registration, as registration number is same. Hence, it is not supply]

Not Supply

Outward supply on which GST is to be paid by receipent under reverse charge.

[Reason- Aggregate turnover excludes value of inward supplies on which tax is payable by a person on reverse charge basis. However, outward supplies on which tax is payable by recipient are not excluded]

1,00,000

Total Aggregate Turnover

7,00,000

 

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