How to calculate Turnover for GST Audit

By | November 21, 2018
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(Last Updated On: December 3, 2018)

How to take Turnover for GST Audit

Video Tutorial by CA Satbir Singh in Hindi

Turnover of my business from 01.04.2017 to 30.06.201 7 is Rs 30 Lakh and from 01.07.2017 to 31.03.2018 Rs 1 core 80 Lakh . Am I liable for GST Audit ?

As per Section 35(5) of CGST Act 2017

Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form and manner as may be prescribed:

As per Rule 80(3) of CGST Rules 2017

Every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get his accounts audited as specified under sub-section (5) of section 35 and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.

Section 2(112) of CGST Act 2017 :- 

turnover in State” or “turnover in Union territory” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and inter-State supplies of goods or services or both made from the State or Union territory by the said taxable person but excludes central tax, State tax, Union territory tax, integrated tax and cess;

Commentary 

  • Aggregate turnover is PAN based for all India Level.
  • Turnover used in Section 35(5) of CGST Act  could be interpreted as aggregate turnover

In other words, the total of the following shall be considered as an aggregate turnover:

  • Value of all taxable supplies of goods and services
  • Value of all Inter-state supplies
  • Value of all exempt supplies of goods and services
  • Value of all export of goods or services or both

Thus Turnover would, therefore, include the following:

  • All taxable supplies other than supplies on which reverse charge is applicable.
  • Supplies between distinct entities (in different States or separate business vertical).
  • Goods supplied to job worker on principal to principal basis.
  • Export or zero rated supplies.
  • Goods received from job worker on principal to principal basis.
  • Supplies of agents/ job worker on behalf of the principal.
  • Exempt supplies under GST: exempt via any notification, non-taxable supplies (like Diesel, Petrol, Liquor etc.)
  • Taxes other than those under GST

However, the following items would be excluded from Turnover:

  • Inward supplies on which taxes are paid under reverse charge
  • Taxes and cesses under Goods and Service Tax
  • Goods supplied for or received back u/s 143 (job work)
  • Interstate supply of services
  • Transactions which are neither supply of goods or service.
  • Supplies provided outside India or received outside India

As per section 2(47) of CGST Act 2017 exempt supply means any supply of goods or/and services or both which may be wholly exemption from tax under section 6 of IGST Act or under section 11 of the IGST Act or attract nil rate of tax, and includes non-taxable supply.

  • For Financial year 2017-18 , GST was implemented w.e.f 01.07.2017. (Thus GST period is 9 months). But Section 35(5) uses “Turnover” of  Financial year , hence  for computing Rs 2 Core Audit Limit , Turnover of whole financial year has to be taken (including from 01.04.2017 to 30.06.2017) so that there is no default due to non compliance .

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