Suggestions on GST Implementation Issues 28.09.2017 by ICAI Indirect Tax Committee

Law Related Issues

1. Definition of term Aggregate Turnover

Section 2(6) of CGST Act provides 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;

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) IGST Act, 2017.

• 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 Suggestions on GST Implementation Issues 28.09.2017 by ICAI Indirect Tax Committee

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