The concept of Annual Aggregate Turnover (AATO) is a fundamental aspect of the Goods and Services Tax (GST) regime in India. It represents the total annual turnover of a business at the Permanent Account Number (PAN) level, encompassing several specific inclusions and exclusions1. Here’s a comprehensive guide to help you understand AATO and its significance:
What is Annual Aggregate Turnover (AATO)?
AATO refers to the total turnover of a business for an entire financial year, calculated from April 1st to March 31st. According to GST law, “aggregate turnover” includes 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 (PAN), computed on an all-India basis2.
Purpose of Calculating AATO
Calculating AATO serves multiple purposes under GST law, including:
- Determining the Threshold for GST Registration: Businesses with an aggregate turnover exceeding specific limits must register for GST. For normal category states, the limit is Rs. 40 lakhs, while for special category states, it is Rs. 20 lakhs3.
- Eligibility for the Composition Scheme: AATO helps assess whether a business can opt for the composition scheme, which offers a simplified tax structure for small businesses.
- Liability to Raise e-Invoice: Businesses with an AATO above Rs. 10 crore are required to raise e-invoices.
- Furnishing Annual Return and Reconciliation Statement: Businesses with an AATO above Rs. 2 crore must furnish the Annual Return (GSTR-9) and Reconciliation Statement (GSTR-9C).
- Eligibility for Quarterly Return Monthly Payment (QRMP) Scheme: Businesses with an AATO below Rs. 5 crore can opt for the QRMP scheme.
- Reporting HSN Codes: Businesses with an AATO above Rs. 5 crore must report six-digit HSN codes, while those with an AATO up to Rs. 5 crore must report four-digit HSN codes.
Components of AATO
AATO comprises the following elements:
- Taxable Sales Value: The total value of sales subject to GST, excluding purchases under reverse charge mechanism (RCM).
- Exempt Sales Value: The value of sales exempt from GST.
- Exports of Goods and Services: The total value of exports.
- Interstate Supplies: Supplies made to sister concerns or between distinct persons under the same PAN, including interstate stock transfers.
How to Calculate AATO
To calculate AATO, add up the values of all the components mentioned above. Here’s an example to illustrate the calculation:
- Suppose Mr. A owns a tea estate with an annual turnover of Rs. 1.60 crore from selling tea leaves (exempt from GST). He also supplies plastic bags along with his crop and charges separately for this, with a turnover of Rs. 5 lakhs which attracts GST3.
- Annual aggregate turnover = 1.6 crore + 5 lakh = 1.65 crore.
Common Mistakes to Avoid
- When calculating AATO, it’s important to avoid common mistakes such as:
- Including central tax, state tax, union territory tax, integrated tax, and cess in the turnover calculation.
- Not excluding the value of inward supplies on which tax is payable by a person on reverse charge basis.
- Understanding AATO is crucial for businesses to ensure compliance with GST regulations and to take advantage of various GST schemes. If you have any specific questions or need further assistance, feel free to ask!
FAQs on Annual Aggregate Turnover (AATO) Under GST
AATO refers to the total annual turnover of a business at the Permanent Account Number (PAN) level, including taxable supplies, exempt supplies, exports, and inter-state supplies, computed on an all-India basis
AATO is crucial for determining the threshold for GST registration, eligibility for the composition scheme, liability to raise e-invoices, and the requirement to furnish annual returns and reconciliation statements
For normal category states, the threshold limit is Rs. 40 lakhs, and for special category states, it is Rs. 20 lakhs. For service providers, the limit is Rs. 20 lakhs for normal category states and Rs. 10 lakhs for special category states
Suppose Mr. A owns a tea estate with an annual turnover of Rs. 1.60 crore from selling tea leaves (exempt from GST) and Rs. 5 lakhs from selling plastic bags (which attract GST). The AATO would be Rs. 1.65 crore
Common mistakes include including central tax, state tax, union territory tax, integrated tax, and cess in the turnover calculation, and not excluding the value of inward supplies on which tax is payable by a person on reverse charge basis.
