Aggregate Turnover in GST and Turnover/Gross Receipts of Income Tax:–
1) Supply between distinct persons without consideration: As per section 7(1)(c) if any dealing attract supply between distinct persons according to schedule II of Cgst act, 2017, without any consideration, it is treated as supply.
Explanation: if a Person (PAN) having more than one GSTIN then every GSTIN are treated as distinct person of each other. Now assume a supply in form of sale transacted between distinct persons and there is no consideration for that. As per Scheadule I, It is supply (for valuation purpose follow Rule 28 of CGST Rule), so the value of supply is a part of Aggregate Turnover of that person, I mean Aggregate Turnover of that PAN. So as per GST law it is consider as Aggregate Turnover. But in Income Tax act, there is no question of generation of revenue for business purpose of that pan (In Income Tax act there is no specific definition of Turnover/Gross Receipts, in simple way turnover is a element / revenue item of business/profession for calculating the income/loss in the head Income from Business or Profession). So for the above sale (Branch transfer) is not a subject matter of Turnover in Income Tax Act61. So difference stands between Aggregate Turnover of GST and Turnover Income Tax.
2) Supply of Items which is covered in Scheadule III of CGST act. (Though as per instruction of Annual Return Fillup process by GST depertment, You may include that kind of figure in “No Supply” option……. So you have the option in Annual Return for declare those details figures in “No Supply” option…..)
Explanation: We knows Scheadule III of CGST act describes the matter which are neither treated as supply of goods, nor as supply of services. So these items are out of GST supply but in time of income tax matter it may create Turnover for Income tax purpose. Suppose a partnership firm engage in Real estate business and the firm purchase land and the land treated as stock in trade so in that case, the purchase of land and after developing, sale of flats is treated as business activity and the profit arise from that part is treated in the head of income from business or profession in Income Tax. So in Income Tax the sale proceeds goes to Turnover but in GST, (Assume All full consideration received after Issuing of Completion Certificate By Competent Authority) it is neither a supply of service or nor a supply of goods as total consideration received after Issuing of Completion Certificate By Competent Authority. So in GST it is not a part of Aggregate Turnover. So difference stands between Aggregate Turnover of GST and Turnover Income Tax.
3) Time of Supply as per CGST ACT Sec 12 / Sec13.
Explanation: Time of Supply of Goods or services or both are depend on sec 12 and section 13 of cgst act and when time of supply arise, we can say Aggregate Turnover taken place, but according to sec 145 of Income tax act61, method of accounting creates difference from GSTs time of supply So in GST it is not a part of Aggregate Turnover. So difference stands between Aggregate Turnover of GST and Turnover Income Tax.
4) In Income Tax if u claim your business or professional income in presemtive scheame, you have to follow ICDS-2, so as per ICDS-2 assessee added input Credit with expenses, So he has to add output liability with Turnover figure. So in that case Turnover =Base Figure+Output Tax, but in GST section 2(6) of CGST says Aggregate Turnover is excluded of CGST/SGST/UTGST/IGST/CESS. So difference stands between Aggregate Turnover of GST and Turnover Income Tax.
5) As per CGST act Section 2(17), Business is very wide. We also know that renting is also covered under business in GST, though with the power of sec11, according to notification, residential house renting for residential purpose is exempted supply of service. So tax collection is not allowed but the service covers the definition of Aggregate Turnover. So in GST it is supply (Tax is exempted) but in Income Tax that kind of Residential house rent is a element/Revenue of calculation of income in the head of Income from House Property so It is not realated to Turnover in Income Tax. So difference stands between Aggregate Turnover of GST and Turnover Income Tax.
6) According to Schedule I of CGST act, Gift (Gift is subject to prove as legal gift) exceeding 50,000/- to an employer by employee in a year is attract supply, so we have to follow rule 28 for valuation as it is supply between realated persons and the value of supply according to rule 28 is a part of Aggregate Turnover in GST but in Income tax This is not a subject matter of Turnover for the Business or Profession. the head of Income from House Property so It is not realated to Turnover in Income Tax. So difference stands between Aggregate Turnover of GST and Turnover Income Tax.
7) In time of sales of capital goods [Capital Goods as per section 2(19) means the goods the value which is capitalized in Books of Accounts, claiming ITC credit and used in the course or furtherance of business] after use [For credit adjustment and release where input credit has been taken previously Follow Section 18(6) read with Rule 44(6)], Supply shall taken place as per GST act and law, so In GST, value of supply after calculation, is subject matter of Aggregate Turnover, But in Income Tax point of view according to Section 2(14) of Income Tax act,1961 all Fixed Assets are not Capital Assets, Some List are there and type of use are subject matters. So If the goods attract in Capital Assets definition (Not using as stock in trade) then the consideration for transfer is subject matter of computing income in the head of Income from Capital Gains in Income Tax. So In income Tax the Transfer Value is not subject matter of Turnover of the business/profession of the person. Even the Fixed Assets is not covered in the list of Capital Assets and used in business (Business/Profession eye of Income Tax and Business in the eye of GST is not same in some cases, Business in the eye of GST law may not treated as business or professional activity in the eye of Income Tax law) in Income tax, the gain / Loss for the sale not covered in the head Income from Capital Gains as per Income Tax act but the Consideration for sale is definitely not treated as Turnover of the business/profession in Income Tax. So difference stands between Aggregate Turnover of GST and Turnover Income Tax.
8) Some Others reasons are also there.
I am Mrinal Kanti Das, 34 years of age and completed B.Com (hons) in the year 2005. Presently I am Senior Accounts and Taxation manager of of S.K. Sinha Ray & Co., an audit and taxation firm at Kolkata. Mridul is my nick name.
Mrinal (Mridul)
B.Com(Hons)
Accounts and Tax Manager
S.K. Sinha Ray & Co.
[email protected]