vat turnover vs gst turnover

[Guest]

One of my client was switched himself from vat regular to gst composition on 1.8.17 while his turnover of preceding fy under vat was 104 lakhs.

hence my point is whether turnover under vat to be consider as aggregate turnover under gst.

Definition of aggregate turnover as per section 2(6) of cgst act is 'aggregate turnover” 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), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess charged.

In VAT act we cant claim of excise duty hence component of excise duty is part of purchase cost. If we bifurcate sale value then there is manufacturing cost + excise duty+ channel profit.

hence sale value under vat includes excise duty component which is part of central tax which should be excluded from turnover. while we cant exclude the same because it is not possible to know excise duty component on sale value.

so my question is that whether turnover under vat act is to be considered as aggregate turnover under gst act? if not then my client is eligible for composition.

[DR.MARIAPPAN GOVINDARAJAN]

Turnover under vat shall not be considered as aggregate turnover under gst

[KASTURI SETHI]

I support the views of Dr.Govindarajan Sir. I would like to further express my views as under :- .

(I). Turnover of preceding year under VAT Act is just criteria for filing option for Composition Scheme.

(ii) Aggregate turnover for the purpose of computing threshold always excludes taxes.

(ii) .You can exclude taxes/Centra Excise duty with consultation from any Cost Accountant. (CMA)

AI Summary

Aggregate turnover excludes taxes, so VAT turnover excluding tax determines composition scheme eligibility for GST registrants. Aggregate turnover for GST excludes taxes, so VAT turnover reported as a gross sale figure that includes excise duty does not equate to GST aggregate turnover; for composition eligibility the preceding year VAT turnover must be converted by excluding tax components, and segregation can be undertaken with the assistance of a cost accountant.