vat turnover vs gst turnover

[jeeshan ali]

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.

AI Summary

VAT Turnover Excluded from GST Aggregate Turnover; Excise Duty Not Considered Under CGST Act. A client transitioned from VAT regular to GST composition in August 2017, with a preceding fiscal year turnover of 104 lakhs under VAT. The query concerns whether VAT turnover should be considered as aggregate turnover under GST. According to the CGST Act, aggregate turnover excludes central taxes like excise duty. Since VAT turnover includes excise duty, it should not be considered for GST aggregate turnover. Both respondents agreed that VAT turnover should not be considered for GST aggregate turnover, and taxes or excise duty should be excluded when calculating the threshold, possibly with a Cost Accountant's assistance.