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August 6, 2020

How to Respond to Email from GSTN on Aggregate Turnover under GST

by Rubina Dsouza in GST

How to Respond to Email from GSTN on Aggregate Turnover under GST

GST Department sends email to taxpayers whose aggregate turnover has exceeded Rs. 5 crore

Introduction

“Aggregate turnover” is the aggregate value of all taxable supplies, exports of goods or/and services or both, exempt supplies and interstate supplies of persons having the same PAN, to be computed on all India basis. However, such taxable supplies do not include the value of inward supplies on which GST is being paid under reverse charge basis. The aggregate turnover also excludes Central tax, State tax, Union territory tax, Integrated tax and cess.

Basically, sum of the following shall be considered as an aggregate turnover:

  1. Value of all taxable supplies of goods and services
  2. Value of all Inter-state supplies
  3. Value of all exempt supplies of goods and services
  4. Value of all export of goods or services or both

However, the following items would be excluded from Turnover:

  1. Inward supplies on which taxes are paid under reverse charge
  2. Taxes and cesses under GST
  3. Interstate supply of services
  4. Transactions which are neither supply of goods or service.
  5. Supplies provided outside India or received outside India

Email from GSTN on Aggregate Turnover under GST

One may have received an email from GSTN on 4th August, 2020 about Aggregate turnover being more than Rs. 5 Cr during FY 2019-20. The summary of the email is that aggregate turnover for the financial year 2019-20 has been computed by GST system based on the returns filed in Form GSTR-3B by all registrations on the common PAN which exceeds Rs. 5 Cr. The returns of FY 2019-20 filed upto 25th July, 2020 have been considered for the said computation.

The email also mentions that the following methodology is used to compute aggregate turnover:

  1. Turnover declared in GSTR-3B has been accounted for the computation for FY 2019-20
  2. If the return of a tax period which was due to be filed but has not been filed for any of the GSTINs registered on the common PAN, the turnover of that period has been estimated by way of extrapolation as follows – (Turnover declared/ No. of GSTR-3B filed) * No. GSTR-3B liable to be filed
  3. The turnover (including extrapolated turnover) of GSTINs has been summed up at PAN level

What is the importance of such computation?

The turnover computed will be used for certain validations in the System such as:-

  1. Determining due date of return filing (20th or 22nd or 24th of the subsequent month for GSTR 3B)
  2. Computation of late fee by the system
  3. Reporting interest on delayed payments based on self-assessment basis (based on recent relief announced due to outbreak of COVID -19)

Does the taxpayer have any option if the turnover computed in the email sent differs from their actual turnover?

It is advised to review the turnover carefully based on GSTR 3B filed for the FY 2019-20 (including balance GSTR3B to be filed for FY 2019-20). If you agree that your aggregate turnover during F.Y. 2019-20 exceeds Rs 5 cr then you are not liable to take any action regarding this e-mail. If any discrepancy is found in the turnover data based on the computation, as explained above and the actual turnover, the taxpayer may file a grievance at https://selfservice.gstsystem.in for redressal.

The taxpayers are advised to upload the below information while raising a complaint in the following format, which will enable the GSTN team to resolve the same and rectify the turnover:-

PAN Legal Name
Sr NoGSTINRegistration Grant DateTax period of last GSTR-3B filedDate of filing of last GSTR-3BStatus (Active/ Cancelled)Turnover as per taxpayer (Rs.)
1234567
1      
2      

What is the relevance of knowing one’s aggregate turnover?

The aggregate turnover is a crucial parameter for determining the following aspects:-

The aggregate turnover is a crucial parameter for determining the following aspects:-

Determining whether registration is required or not-

  1. Aggregate Turnover is relevant for a person to determine threshold limit to obtain registration under GST.
  2. Threshold turnover limit for exclusively supply of goods = Rs 40 lakh (Rs  20 lakh in case of supplies effected  from special category states)
  3. Threshold turnover limit  for supply of Services or (goods and services both) : Rs 20 lakh (Rs  10 lakh in case of supplies effected  from special category states)

Determine the limit of composition levy –

Threshold limit to opt for composition scheme: Rs 1.5 crore in a financial year (Rs 75 lakh in case of supplies effected from special category states).

To determine a “Taxable person” – 

Section 2 of CGST Act defines the “taxable person” as a person who has obtained registration or is liable to register as per section 22 and 24 of CGST Act. Here the Section 22 provides a liability to register when the tax payer’s turnover exceeds the limit as determined in certain cases. This is again based on aggregate turnover.

Calculation of Late fee

  1. Under section 33 any registered taxable person who fails to file the return u/s 30 i.e Annual return shall be liable to pay late fees of Rs. 100 for every day when such failure continues subject to a maximum of an amount of 0.25% of his aggregate turnover.
  2. This can escalate the amount of late fee because aggregate turnover will include all supplies except reverse charge.

To determine whether Audit is required –

Registered persons with an aggregate turnover exceeding the prescribed GST audit limit of Rs 2 Crore during a financial year are liable for GST Audit. The turnover limit of Rs 2 Crore is same for the registered tax persons across all States and UTs. Thus, no separate turnover limit is defined for Special Category States for GST Audit.

Therefore, it is advised to carry on the computation of aggregate turnover accurately as the same will be used at a number of places which will in turn determine the tax liability of a person.

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