As per the country’s GST rules and regulations, businesses with an aggregated turnover exceeding Rs.20 lakh (or Rs.40 lakh for a certain supply of goods) must register under GST (Goods and Services Tax).
This limit is restricted to Rs.10 lakh for North Eastern and hilly areas, tagged as special category states. To calculate and know the overall payable GST in a financial quarter, individuals can take the help of a GST calculator and get accurate results within seconds.
How to calculate aggregate turnover for GST registration?
According to Section 2(6) of the CGST Act, an aggregate turnover defines the aggregate value of taxable supplies, excluding inward supplies values, excused supplies, exports goods or services or supply of both inter-states having similar PAN to be calculated in an all-India basis. This aggregate turnover is essential to evaluate GST registration limit check and whether the supplier needs to register his/her business under GST.
Let’s take a look at the calculation of aggregate turnover:
[Value of taxable supplies+ Exports+ Inter-state supplies+ Exempt supplies – Taxes +Value of Inward supplies + Value of taxable supplies under reverse charge – Value of non-taxable supplies] of individuals with similar PAN across all business entities in India.
However, when evaluating an aggregate turnover, values of inward supplies of goods and services, taxes under CGST, SGST, IGST, non-taxable supplies of goods and services, etc., are excluded.
Let’s take an example to get a better idea:
Ex: An individual owns an agricultural estate in West Bengal with an annual turnover of Rs.2 crore. This business is exempted from tax payments. However, he/she charges for the bags for the supply of products. The annual turnover from the sale of bags is Rs.4 lakh which falls under GST. Should that individual register his/her business under GST?
Ans: Yes, the individual must register his/her business under GST and must know how to register for GST online. Here, aggregate turnover is considered and not taxable turnover. Also, this estate is situated in West Bengal, which falls under the normal state category. Therefore, the overall aggregate turnover of that individual’s business, including the exempted turnover, exceeds the actual threshold limit for GST registration of Rs.40 lakh.
In simpler words, even if the taxpayer is free from paying taxes, he/she must adhere to GST registration rules when aggregate turnover exceeds the threshold limit.
In this regard, borrowers can also use the GST calculator to compute the necessary GST payment value and differentiate between different tax slabs under varied GST categories.
Importance of aggregate turnover under GST
Before knowing the complete guide for the GST registration process in India, individuals must learn the relevance of aggregate turnover under GST:
- The aggregate turnover concept for evaluating GST registration limit has enhanced tax collection procedure.
- Using this aggregate turnover system, all exempted organisation has registered under GST.
- Moreover, government can monitor businesses and make them register under GST rules. This, further expanded the base of taxpayers.
Registering businesses under GST law, business owners can avail of a high-value business loan at competitive interest rates. This is because the activities of these businesses are registered under a government entity, and the chances of fraud are minimized.
However, before availing of such a financing option, borrowers must use a business loan calculator to determine the EMIs and overall interest outgo throughout the repayment tenor. Besides, existing business loan borrowers of leading financiers like Bajaj Finserv can also enjoy the benefit of pre-approved offers. Such exclusive offers are available on a range of financial products, such as business loans, personal loans, credit cards, etc. By availing of these offers, borrowers can dodge the hassle of extensive documentation and speed up the loaning process. Existing borrowers can check their pre-approved offers by mentioning their names and contact details.
Besides understanding the aggregate turnover and its calculation, one must also know the requirement of GST registration. Also, borrowers can use a GST calculator to conveniently calculate the net GST payment in a financial quarter and save time and avoid confusion.