Issues in Definition of Aggregate Turnover under GST

Suggestions on GST Acts (July 2017) by Institute of Chartered Accountants of India

Definition of term Aggregate Turnover

Section 2(6) of CGST Act provides that “aggregate turnover” means the aggregate value of all taxable supplies, exempt supplies, exports of goods or services or both and inter-State supplies of a person having the same PAN, to be computed on all India basis and excludes taxes, if any, charged under the CGST Act, SGST Act, UTGST Act and the IGST Act, as the case may be;

Issue

 The term “exports of goods or services or both” cover all the exports which may be
taxable as well as non-taxable. Reference may be drawn from wordings in section 2(108) (taxable supply) CGST Act read with sections 2(5) (export of goods) and 2(6) (export of services) Revised IGST Law.

 If ‘exempt supplies’ are included in the aforesaid threshold of Rs.20 lakh that would mean that if a dealer is involved in exclusive supply of exempt goods/services and if he happens to make a small supply of taxable goods/services, then he will become liable for registration. As such the turnover limit of Rs.20 lakh is too low a limit and if the exempt supplies are also included therein than a very large number of people will become liable for registration without any substantial revenue to the Government.

Suggestion

 It is therefore suggested that the reference of the words “export of goods /  services” be accordingly removed from definition of Aggregate Turnover.

 It is suggested that instead of words “aggregate turnover” the words “aggregate
turnover of taxable supplies” be used.

Read ICAI Suggestions on GST Act to Govt : July 2017

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