Page 37 - DTPA Journal Aug 18

DTPA - J | 2017-18 | Volume 3 | August 2018

(6) “aggregate turnover” means the aggregate value of category state is liable to obtain registration as the
all taxable supplies (excluding the value of inward aggregate turnover is above ten lacs. But is the
supplies on which tax is payable by a person on reverse distinct person in WB liable to obtain registration as
charge basis), exempt supplies, exports of goods or the aggregate turnover is below 20 lac.
services or both and inter-State supplies of persons
e. Section 35(5) prescribes that any person whose
having the same Permanent Account Number, to be
turnover exceeds the prescribed limit shall get his
computed on all India basis but excludes central tax, accounts audited. Turnover is not defined anywhere
State tax, Union territory tax, integrated tax and cess;
in the CGST Act. As such either it should be
(112) “turnover in a State” or “turnover in Union territory” "aggregate turnover" or "turnover in a state or UT".
means the aggregate value of all taxable supplies The threshold limit of "aggregate turnover" is
(excluding the value of inward supplies on which tax is prescribed in Rule 80(3) of the CGST Rules but the
payable by a person on reverse charge basis) and same has not been prescribed for turnover or
exempt supplies made within a State or Union territory turnover in a state. As such, it is not clear, whether we
by a taxable person, exports of goods or services or should consider the "turnover in a state or UT" or
both and inter-State supplies of goods or services or "aggregate turnover" for being subjected to
both made from the State or Union territory by the said audit.Now, if a person has, say, ten registrations,
taxable person but excludes central tax, State tax, whether in the same state or in different states or UT,
Union territory tax, integrated tax and cess; and if one registered person has a turnover
exceeding two crores, then all the persons registered
Section 35
under the same PAN shall have to get their accounts
(5) Every registered person whose turnover during a audited, regardless of their turnover.
financial year exceeds the prescribed limit shall get his
accounts audited by a chartered accountant or a cost PROVISION:
accountant and shall submit a copy of the audited 1. "Exempt supply means a supply which has been
annual accounts, the reconciliation statement under exempted under section 11 of the CGST Act or
sub-section (2) of section 44 and such other documents section 6 of the IGST Act."
in such form and manner as may be prescribed.
The central government has the power to transfer
ANALYSIS: any supply from the exempted list to taxable list or
vice versa without obtaining the approval of the
Sub sections (6) and (112) of section 2 are almost same
parliament.
except that "aggregate turnover" refers to aggregate
value of all supplies of persons having the same PAN Example: Goods notified under notification no.
where as "turnover in a state refers to all supplies made 2/2017-CT(R) and services notified under
by a taxable person from the State or UT. Now when we notification no. 12/2017-CT(R) can be made taxable
analyze the above two provisions, the following queries or taxable supplies can be exempted in exercise of
comes to our mind: powers conferred by section 11(1) of the CGST Act.

a. When "aggregate turnover" means all taxable
supplies then what is the necessity of separately
2. Non taxable supply means a supply on which tax is
mentioning 'export of goods or services or both' and
not leviable under the Act.
'inter-state supplies'?
The central government can transfer any supply
b. Why is zero rated supplies not mentioned in both the
from 'non taxable' category to 'taxable' category or
definitions?
vice versa but it has to take the approval of the
c. If a person has two different business verticals parliament.
registered in a state, then whether the turnover of Example: Alcoholic liquor for human consumption
both the verticals shall be aggregated for the
and (at present) 5 petroleum products.
purpose of calculating turnover in a state?
3. Non GST supply is a supply which is outside the
d. A person has two registrations, one in a specified
jurisdiction of GST.
category state having a turnover of 5 lacs and the
other in West Bengal having a turnover of six lacs. The central government cannot transfer any supply
According to section 22, the person in the specified from the 'non GST' category to 'GST' category even
with the concurrence of the parliament without

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