Aggregate Turnover vs Turnover explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 10 uses two turnover expressions and never uses either loosely. One decides whether you may be in the scheme. The other decides what you pay. Confusing them produces both wrong eligibility calls and wrong quarterly payments.
Aggregate turnover under s.2(6) is PAN-wide and all-India and governs eligibility — the ₹1.5 crore, ₹75 lakh and ₹50 lakh gates, and the s.10(3) lapse. Turnover in State or Union territory under s.2(112) is a per-registration figure and is the payment base in Rule 7. Explanation 1 to s.10 adds pre-registration turnover to the eligibility figure; Explanation 2 removes it from the payment figure. Both exclude interest and discount on deposits, loans and advances.
The two definitions, side by side
Section 2(6) — aggregate turnover: "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."
Section 2(112) — turnover in State or turnover in Union territory: "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) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and inter-State supplies of goods or services or both made from the State or Union territory by the said taxable person but excludes central tax, State tax, Union territory tax, integrated tax and cess."
| Aggregate turnover, s.2(6) | Turnover in State, s.2(112) | |
|---|---|---|
| Scope | All persons on the same PAN, all-India | One State or Union territory, one registered person |
| Includes | Taxable, exempt, exports, inter-State supplies | The same four heads, but only as made within or from that State |
| Excludes | Inward supplies taxed under reverse charge; CGST, SGST, UTGST, IGST and cess | Identical exclusions |
| Job in section 10 | Eligibility and lapse | Payment base in Rule 7 |
Both exclude inward reverse charge supplies. So the tax a composition dealer pays under s.9(3) or s.9(4) on inward supplies never enters either turnover figure, in either direction. It is a separate liability discharged in cash. Reverse charge and the composition dealer →
The two Explanations pull in opposite directions
Explanation 1 — "For the purposes of computing aggregate turnover of a person for determining his eligibility to pay tax under this section, the expression 'aggregate turnover' shall include the value of supplies made by such person from the 1st day of April of a financial year up to the date when he becomes liable for registration under this Act, but shall not include the value of exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount."
Explanation 2 — "For the purposes of determining the tax payable by a person under this section, the expression 'turnover in State or turnover in Union territory' shall not include the value of following supplies, namely — (i) supplies from the first day of April of a financial year up to the date when such person becomes liable for registration under this Act; and (ii) exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount."
Both were inserted together by section 93 of the Finance (No. 2) Act, 2019, notified through Notification No. 1/2020-CT dated 01.01.2020.
The same period, treated two ways, deliberately. For eligibility, a person who traded for four months before crossing the registration threshold cannot pretend those four months did not happen — Explanation 1 counts them. For tax, those months were outside the levy, so Explanation 2 keeps them out of the composition sum.
And both keep interest out. A bank balance or a loan to a related party does not push a dealer through the eligibility gate, and does not attract 1% either.
Three consequences that decide real cases
Branches aggregate for eligibility, not for payment. A person with ₹60 lakh in Rajasthan and ₹30 lakh in Uttarakhand has aggregate turnover of ₹90 lakh. Rajasthan's limit is ₹1.5 crore and Uttarakhand's is ₹75 lakh. Because ₹90 lakh exceeds Uttarakhand's limit, that registration is ineligible — and because the proviso to s.10(2) requires every registration on the PAN to opt, Rajasthan is lost as well. That is ICAI's own worked example, and it turns entirely on aggregate turnover being all-India.
Exempt supplies count for eligibility, always. Section 2(6) names exempt supplies expressly. A dealer with ₹1.2 crore of taxable sales and ₹40 lakh of exempt sales has ₹1.6 crore of aggregate turnover and is out — even though only ₹1.2 crore would ever bear composition tax under Rule 7 row 3.
A person unregistered in the preceding year still had turnover. Somebody dealing exclusively in exempt supplies was not liable to register, but their exempt turnover is aggregate turnover. ICAI's position is that eligibility turns on its quantum: below the limit, eligible; above it, not.
Where each figure is actually used
| Provision | Figure used |
|---|---|
| s.10(1) entry gate — ₹1.5 crore / ₹75 lakh | Aggregate turnover, preceding FY |
| s.10(2A) entry gate — ₹50 lakh | Aggregate turnover, preceding FY |
| Second proviso service allowance — 10% or ₹5 lakh | Turnover in a State or Union territory, preceding FY |
| s.10(3) lapse | Aggregate turnover during the current FY |
| Rule 7 rate rows 1, 2, 4 | Turnover in the State or Union territory |
| Rule 7 rate row 3 | Turnover of taxable supplies in the State or Union territory |
The second proviso is the one people misplace. It is a State figure, not a PAN figure — so a dealer registered in three States computes three separate service allowances, each from that State's preceding-year turnover. The 10% service allowance →
Lapse is tested on the running all-India figure
Section 10(3): the option "shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds the limit specified under sub-section (1) or sub-section (2A)".
Three features of that sentence. It runs on aggregate turnover, so a dealer must track the all-India PAN figure through the year, not just the State they pay in. It lapses "with effect from the day" — not from the quarter, month or year end. And it is automatic: no order, no notice, nothing to await.
Rule 6(2) supplies the consequences — tax under s.9(1) from that day, a tax invoice for every taxable supply thereafter, and FORM GST CMP-04 within seven days. Rule 6 and the CMP-04 chain →
Key takeaways
- s.2(6) aggregate turnover is PAN-wide and all-India; s.2(112) turnover in State is per registration.
- Explanation 1 includes pre-registration turnover for eligibility; Explanation 2 excludes it from the payment base.
- Both Explanations exclude interest and discount on deposits, loans and advances.
- Both definitions exclude inward reverse charge supplies.
- The second proviso's 10% is computed on the State figure, not the PAN figure.
- Section 10(3) lapse runs on aggregate turnover and takes effect from the day of crossing.
Read next
- The ₹1.5 Crore Composition Threshold and the Eight ₹75 Lakh States
- Rule 7 Rate Table, Column by Column
- The Second Proviso: 10% of Turnover or ₹5 Lakh of Services
- Rule 6: Lapse, Withdrawal and the CMP-04 to CMP-07 Chain
Disclaimer: Positions stated as on 5 September 2026, based on sections 2(6), 2(112) and 10 with Explanations 1 and 2 of the CGST Act, 2017, and Rule 7 of the CGST Rules, 2017, as recorded in the ICAI Bare Law (12th edition, amended to 31 March 2026), and the worked examples in the ICAI Handbook on Composition Scheme under GST (February 2026, 3rd edition).