How to Calculate Aggregate Turnover for GST Registration?

If you are a small or medium business owner or a startup founder in India, then you will be required to register for Goods and Services Tax (GST). GST is a unified tax system that replaces multiple taxes such as VAT, Service Tax, and Central Excise Duty.

One of the most important factors in determining whether a business is required to register for GST is the aggregate turnover. The term "aggregate turnover" is defined in the GST law and includes all taxable supplies, exempt supplies, and exports of goods and services made by a person with the same PAN number.

In this article, we will explain what aggregate turnover is, how it is calculated, and provide some examples to help you understand its practical application.

What is Aggregate Turnover?

Aggregate turnover is the value of all supplies (taxable and non-taxable) made by a taxable person during a financial year. It includes the following:

All taxable supplies
All exempt supplies
All exports of goods and/or services

However, it excludes the following:

Taxes levied under GST
Value of inward supplies

How to Calculate Aggregate Turnover?

Now that we know what aggregate turnover is, let's take a look at how to calculate it.

The formula to calculate aggregate turnover is as follows:

Aggregate Turnover = (Value of all taxable supplies + Value of all exempt supplies + Value of all exports) - (Value of any taxes levied under GST + Value of inward supplies)

Let's look at an example to make this clearer.

Example

ABC Private Limited is a taxable person located in Mumbai. During the financial year 2020-21, they made the following supplies:

Value of taxable supplies - Rs. 50,00,000
Value of exempt supplies - Rs. 10,00,000
Value of exports - Rs. 20,00,000
Taxes levied under GST - Rs. 5,00,000
Value of inward supplies - Rs. 8,00,000

To calculate the aggregate turnover of ABC Private Limited, we will use the formula mentioned above:

Aggregate Turnover = (Value of all taxable supplies + Value of all exempt supplies + Value of all exports) - (Value of any taxes levied under GST + Value of inward supplies)

Aggregate Turnover = (50,00,000 + 10,00,000 + 20,00,000) - (5,00,000 + 8,00,000)

Aggregate Turnover = Rs. 67,00,000

Therefore, the aggregate turnover of ABC Private Limited for the financial year 2020-21 is Rs. 67,00,000.

Conclusion

Calculating the aggregate turnover is an important step in determining whether a business is required to register for GST or not. It is essential for small and medium business owners and startup founders to understand the concept of aggregate turnover to comply with GST regulations and avoid any penalties or legal issues.

We hope this article has helped you understand what aggregate turnover is and how to calculate it. If you have any further questions, please feel free to reach out to us.