What is Annual Aggregate Turnover (AATO) under GST? The Annual Aggregate Turnover (AATO) in GST is an important term that determines a business’s compliance requirements under the Goods and Services Tax (GST) framework in India. It’s vital when deciding if the business should be registered under GST, whether composition schemes are applicable, and compliance requirements like e-invoicing and filing of returns frequency. It is crucial to know aggregate turnover for the GST regime to bring compliance and avoid penalties. This article explains succinctly about AATO in GST, calculation, importance, and effects on businesses.
Understanding Aggregate Turnover in GST Aggregate turnover is 20 lakhs and is further divided into 10 lakhs for special states and 40 lakhs for service providers as per GST law. Before stepping into AATO in GST, it is important to look into the definition of aggregate turnover. According to the Indian GST law, aggregate turnover means the sum of all taxable supplies, exempt supplies, export of services and inter-state supplies of one Permanent Account Number (PAN) across the whole country. It will also exclude intra-state supply of goods and services (as these are covered by the GSTR 1 return), and other exempt items like reverse charge supplies and GST taxes, which include Central GST, State GST, Integrated GST, and Compensation Cess. What Is AATO? Full Form and Meaning An AATO business can have its annual aggregate turnover calculated as AATO. For each financial year aggregate of all the business operations within India for the single PAN is used to calculate a TIN level turnover. Components of Aggregate Turnover for GST Registration There are several features that a business must meet in order to be compliant for GST which affects their registered status. There are a few components and key factors that form part of the aggregate turnover. These include:
1. Taxable Supplies: This includes the sale of goods and other services to the general public where GST is applicable.
2. Exempt Supplies: These supplies do not attract GST such as agricultural produce, unprocessed products, and medical care services.
3. Exports (Zero-rated supplies): This includes supplies made by the firm to foreign nationals and to Special Economic Zones (SEZs) are considered in aggregate turnover.
4. Inter-State Supplies: A registered person or business is allowed to trade in taxable goods and services across state borders on the same PAN.
However, AATO in GST does not include the following two factors:
1. Inward supplies taxable under reverse charge.
2. Value of taxes such as CGST, SGST, IGST, and Compensation Cess.
Threshold Limit for GST Registration Based on AATO Registration for GST is required and is based on the business’ Annual Average Turnover (AATO). A business which turns over a certain amount is required to file for GST registration. The following table outlines the threshold limits:
Type of Supply AATO Threshold for GST Registration Supply of Goods (Normal States) Rs.40 lakh Supply of Goods (Special Category States) Rs.20 lakh Supply of Services (All States) Rs.20 lakh Composition Scheme Eligibility Rs.1.5 crore (Rs.75 lakh for special category states)
Importance of AATO in GST Compliance 1. GST Registration Requirement As stated before, every business is required to register under GST and the limit that triggers registration is called the aggregate turnover for the business.
2. Applicability of Composition Scheme The AATO in GST of Rs.1.5 crore and less (Rs.75 lakh in special category states) makes these businesses eligible for the Composition Scheme. Under this scheme, businesses are required to pay GST, but at a fixed rate on turnover, making compliance easier.
3. E-Invoicing and GST Return Filing Businesses with an AATO exceeding Rs.5 crore must comply with the e-invoicing system. Also compliance requires such a business to file GST returns through the particular portal. Likewise, AATO determines whether a taxpayer should file GST returns monthly or quarterly.
4. Impact on Input Tax Credit (ITC) Reporting the aggregate turnover inaccurately can affect a business’s ability to claim Input Tax Credit (ITC) , so accuracy in reporting is of utmost importance.
How to Calculate Annual Aggregate Turnover in GST? Within the scope of GST, AATO stands for Annual Aggregate Turnover. To calculate AATO, you will need to add the turnover of all supplies made excluding all taxes. We can express it as follows:
AATO = (Taxable Supplies + Exempt Supplies + Exports + Inter-state Supplies) - (Taxes and Reverse Charge Liabilities) Now let us consider an example of a business and the following transactions in a financial year:
1. Taxable Supplies: Rs.50 lac
2. Exempt Supplies: Rs.10 lac
3. Exports: Rs.5 lac
4. Inter-state Supplies: Rs.15 lac
The total AATO will be
AATO = (Rs.50L + Rs.10L + Rs.5L + Rs.15L) = Rs.80 lakh
Since this amount is under Rs. 1.5 crores, this business is eligible for the Composition Scheme under GST.
AATO in GST Portal – How to Check? GST portal has provided businesses with a simplified AATO workflow to check AATO in GST. The steps are:
1. Access the GST Portal .
2. Go to the Dashboard and click Annual Aggregate Turnover (AATO).
3. Check the AATO of the last financial year as recorded by GST officials.
4. Businesses should rectify any misleading documents regarding the turnover.
The measures aid businesses in addressing the issues of compliance and GST filings better.
Common Mistakes in AATO Calculation Mistakes in the ordinary AATO computation affects businesses’ compliance in GST. Some include the following:
1. It is considered common to include GST taxes when computing AATO turnovers.
2. The exporting of goods and inter-state supply is regularly omitted from the AATO turnover.
3. Exempt supplies are often ignored when computing AATO.
4. Some people do not bother checking their turnover limits for the purpose of Composition Scheme application.
Sales records and turnover details ought to be tracked regularly to prevent incurring penalties.
Conclusion AATO pre-determines GST registration eligibility, compliance requirements and the applicable tax scheme a business qualifies for. It exercises the power that includes aggregate turnover for a GST registration i.e. taxable supplies, exempt supplies, exports, inter-state supplies and [inward supplies under reverse charge. During these calculations, GST taxes and Inward supplies under reverse charges are never factored in.
Companies must remember to double-check their AATO on the GST portal and keep providing information that is necessary to meet your tax obligations. Turnover records must be well kept and calculated to access the Composition Scheme and avoidance of penalties.
For more detailed information on aggregate turnover and it’s relevance in GST compliance, check out Swipe Blogs .
FAQs 1. What is AATO in GST? “Annual aggregate turnover” or AATO relates to GST in the aspect that it measures the total sales volume of the business during a financial year and it helps in determining if the business unit requires GST registration and what is the return filing frequency period as well as compliance requirements of the business.
2. How is aggregate turnover in GST calculated? In order to determine the aggregate turnover in GST, one needs to sum the taxable supplies made within the country, exempt supplies made within the country, and exports and inter-state supplies made by the business, deducting any GST and reverse charge liabilities.
3. What is AATO full form? AATO full form stands for Annual Aggregate Turnover which is the total value of business turnover per state with respect to the PAN of the business under the entire nation in a particular financial year.
4. Is AATO in GST calculated state-wise or PAN-wise? AATO in GST is calculated on PAN basis, that is, the total from all states from which the business is actually done is taken into account.
5. What is aggregate turnover for GST registration? The aggregate turnover refers to the total within-country taxable and exempt supplies made by the business, export supplies made from the country, and interstate supplies rendered, as an amount to see if there is a need for GST registration.
6. What is the threshold for GST registration based on AATO? According to the goods and services tax(GST), businesses should register if their AATO upon goods exceeds 40 lakh rupees or 20 lakh in special category states, or INR 20 lakh in services.
7. Does AATO include GST taxes? Aggregate turnover does not include Central Goods and Services Tax(CGST), State Goods and Services Tax(SGST), Integrated Goods and Services Tax(IGST) or any compensation Cess while deeming AATO.
8. How does AATO impact GST return filing? Businesses with an AATO of GST that is greater than 5 crore rupees have to file ASM monthly returns. If the AATO is below that level, they may also choose to file quarterly returns under the QRMP scheme.
9. Where can I check my AATO in GST? On the GST portal, you can simply log into your account and select “Annual Aggregate Turnover” to check your AATO.
10. Can a business opt for the Composition Scheme based on AATO? Yes, businesses can opt for composition schemes if their AATO is less than 1.5 crores of GST, or 75 lakh in special states, and pay GST at a lower rate.
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