As a Small or Medium business owner or a startup founder in India, it is crucial to be aware of the Aggregate Annual Turnover (AATO) under the Goods and Services Tax (GST). This is because the AATO determines your eligibility for GST registration, filing of returns, and payment of taxes.
Let's start by understanding what exactly the AATO is and how it is calculated.
The AATO is the total value of all taxable supplies (inter-state and intra-state) made by a business in India during a financial year. This includes the value of exempt supplies, exports, and inter-state supplies made to registered or unregistered dealers.
It is important to note that the turnover of all businesses under the same PAN is considered while calculating the AATO. This means that if you have multiple businesses registered under the same PAN, their turnovers will be added up to calculate the AATO.
The AATO is calculated based on the turnover of the previous financial year. For example, if you want to calculate your AATO for the financial year 2021-22, you will have to consider the turnover of the previous financial year, which is 2020-21. The turnover includes the value of all goods and services supplied by your business, including GST.
Let's take an example to understand this better. Suppose your business had a turnover of Rs. 60 lakhs in the financial year 2020-21. This includes the value of all taxable supplies, exempt supplies, exports, inter-state supplies, and intra-state supplies made by your business. In this case, your AATO for the financial year 2021-22 would be Rs. 60 lakhs.
The AATO is an important factor for determining the GST registration, return filing, and payment of taxes by a business. Let's understand this in detail:
If your business has an annual turnover of more than Rs. 20 lakhs (or Rs. 10 lakhs for special category states), you are required to register for GST. However, if your turnover is below this threshold, GST registration is not mandatory. It is important to note that the threshold limit is calculated based on the AATO of the previous financial year. So, if your AATO for the previous financial year is more than Rs. 20 lakhs, you are required to register for GST.
All businesses registered under GST are required to file GST returns on a monthly or quarterly basis, depending on their turnover. However, businesses with an AATO of up to Rs. 5 crore have the option to file quarterly returns. Businesses with an AATO above Rs. 5 crore are required to file monthly returns.
The GST payable by a business is based on the AATO, the rate of tax applicable to its goods or services, and the input tax credit available. The AATO determines the category of the business (composition scheme, regular scheme, or mandatory registration), which in turn determines the rate of tax applicable to it.
The Aggregate Annual Turnover (AATO) under GST is an important factor for determining the GST registration, return filing, and payment of taxes by a business. It is calculated based on the turnover of the previous financial year and includes the value of all taxable supplies, exempt supplies, exports, inter-state supplies, and intra-state supplies made by the business. As a Small or Medium business owner or startup founder in India, it is crucial to be aware of your AATO and ensure that you comply with the GST regulations.
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