Aggregate Turnover in case of Advances received

[Krishna Murthy]

The definition of Aggregate Turnover as per Sec 2(6) does not include advances received. As per Sec 22, a person is liable for registration when the Aggregate Turnover exceeds 20 Lakhs.

In one situation, rent receivable or received is ₹ 18 Lakhs PA and advance received is ₹ 5 Lakhs which is adjustable against future rents which shall be last 5 months of the lease tenure. Is the person liable for registration?

Time of supply for advance received for services is on receipt of payment. Are advances to be considered for the purpose of computing aggregate turnover ₹ 20 Lakhs ?

[Shilpi Jain]

Turnover in the context of GST has to be seen from the point of the occurrence of the Time of Supply. Turnover as per financials will not have a relevance.

So in this context registration would be required.

[DR.MARIAPPAN GOVINDARAJAN]

Registration is liable to be taken.

[KASTURI SETHI]

I concur with the views of both experts.

[NEERAJ KUMAR, RANCHI]

Where it is given that Aggregate Turnover does not include advances received?

As per Sec 2(6) (6) "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.

....................... Therefore this notion that Aggregate Turnover does not include advances received is wrong. Point of taxation in GST is consideration received or supply made which ever is earlier. So in your case you are liable for registration.

AI Summary

Advances Count in Aggregate Turnover: Clarifying GST Registration Threshold for Rent Receivable and Advances Exceeding 20 Lakhs A discussion on whether advances received should be included in the calculation of Aggregate Turnover for Goods and Services Tax (GST) registration. The initial query raised concerns about whether a person with rent receivable of 18 Lakhs and an advance of 5 Lakhs, totaling 23 Lakhs, is liable for GST registration, given the threshold is 20 Lakhs. Respondents clarified that advances are considered part of Aggregate Turnover, and registration is required as the turnover exceeds the threshold. The point of taxation is when payment is received or supply is made, whichever comes first.