Definition of Turnover in a State and Zero rated supply under revised model GST Law

In India, the Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption. The GST is paid by consumers, but it is remitted to the government by the businesses selling the goods or services. All businesses that sell goods or services in India must register for GST and submit GST returns.

Under the revised model GST law, there are two types of supplies – taxable and exempt. Taxable supplies are goods or services that are subject to GST, while exempt supplies are goods or services that are not subject to GST. In addition, there are two types of GST – central GST (CGST) and state GST (SGST). The CGST is levied by the central government, while the SGST is levied by the state government.

One important aspect of the revised model GST law is the definition of turnover in a state. Turnover in a state refers to the aggregate value of all taxable supplies (excluding GST) and exempt supplies made by a taxpayer in a particular state. This value is calculated on a yearly basis, and it includes all supplies made within the state as well as supplies made outside the state but delivered within the state.

For example, if a business based in the state of Maharashtra sells goods worth Rs. 1 crore to a buyer in Gujarat, the turnover in Maharashtra will include the value of these supplies. However, if the same business sells goods worth Rs. 1 crore to a buyer in Maharashtra, the turnover in Maharashtra will only include the value of the supplies made within the state.

Another important aspect of the revised model GST law is zero rated supply. Zero rated supply refers to the supply of goods or services that is not subject to GST. This includes exports of goods or services, supplies made to Special Economic Zones (SEZs), and supplies made to international organizations. Zero rated supplies are still considered taxable supplies, but they are taxed at a rate of 0%.

Under the revised model GST law, businesses that make zero rated supplies are entitled to claim a refund of the input tax credit (ITC) that they have paid on their purchases. This means that if a business purchases goods or services that are subject to GST, and then uses those goods or services to make zero rated supplies, they can claim a refund of the GST paid on those purchases.

In conclusion, the revised model GST law has introduced several important changes to the way GST is levied in India. The definition of turnover in a state is an important aspect of this law, as it determines the amount of GST that businesses are required to pay. Zero rated supply is another important aspect of the law, as it allows businesses to claim a refund of the GST paid on their purchases when making supplies that are not subject to GST.