Value of Supply of Goods or Services | Taxation for CA Intermediate PDF Download

 Page 1


 
Section 15 of CGST Act, 2017 explains value of taxable supply. Value of supply means the  
money that a seller would want to collect for the goods and services supplied. The amount 
collected by the seller from the buyer is the value of supply. But where parties are related and 
a reasonable value may not be charged, or transaction may take place as a barter or exchange; 
the GST law prescribes that the value on which GST is charged must be its ‘transactional 
value’. This is the value at which unrelated parties would transact in the normal course of 
business. It makes sure GST is charged and collected properly, even though the full value may 
not have been paid. 
Forward charge 
Forward charge (normal charge) or direct charge is the mechanism where the supplier of 
goods/services is liable to pay tax. 
For instance, if a chartered accountant provided a service to his client, the service tax will be 
payable by the chartered accountant; or for instance, if a car manufacturing company sold some 
auto parts to a trader and collected tax from the trader, the manufacturing company remits the 
tax. 
Under the current tax system, most transactions are covered under the forward charge 
mechanism. 
 
 
Reverse charge 
Page 2


 
Section 15 of CGST Act, 2017 explains value of taxable supply. Value of supply means the  
money that a seller would want to collect for the goods and services supplied. The amount 
collected by the seller from the buyer is the value of supply. But where parties are related and 
a reasonable value may not be charged, or transaction may take place as a barter or exchange; 
the GST law prescribes that the value on which GST is charged must be its ‘transactional 
value’. This is the value at which unrelated parties would transact in the normal course of 
business. It makes sure GST is charged and collected properly, even though the full value may 
not have been paid. 
Forward charge 
Forward charge (normal charge) or direct charge is the mechanism where the supplier of 
goods/services is liable to pay tax. 
For instance, if a chartered accountant provided a service to his client, the service tax will be 
payable by the chartered accountant; or for instance, if a car manufacturing company sold some 
auto parts to a trader and collected tax from the trader, the manufacturing company remits the 
tax. 
Under the current tax system, most transactions are covered under the forward charge 
mechanism. 
 
 
Reverse charge 
In the case of a reverse charge, the receiver of services is liable to pay the tax where the 
Government is empowered u/s 9(3) of the CGST Act to levy the tax. In the example of the 
chartered accountant (CA), the client would be liable, not the CA. Some services to which the 
reverse charge mechanism applies include goods transport agency services, legal services, rent-
a-car services, manpower supply services, import of taxable services, security services, service 
portion in execution of works contract, sponsorship services, etc. 
In India, currently, reverse charge is not applicable on goods except in a few states like Punjab, 
which has a purchase tax on certain goods. Now under GST, there will be a reverse charge on 
goods as well. 
The purpose of applying reverse charge is twofold: to increase compliance by unorganized 
sectors, such as transport, and to increase tax revenues. 
Vouchers for exchangeable goods 
Many firms or companies issue vouchers (or gift tokens) for the purchases made to promote 
their sales or employers give to their employees gift vouchers to be redeemed immediately or 
on a later date against any supply of goods or services. The vouchers are instruments that can 
be exchanged as payment of goods or services of the designated value. Therefore, it is important 
here to understand the time of supply in case of supply of vouchers in GST.  
As per 12(4) of CGST Act, in case of supply of vouchers by the supplier the time of supply 
shall be the:- 
• The date of issue of voucher if the supply is identifiable at that time or 
• The date of redemption of voucher in all the other cases (if not identifiable) 
Example: Suppose a cloth showroom sold gift voucher to a customer for `2000 on 10 May and 
th
the customer can purchase anything with the gift voucher. The customer purchases actual goods 
on 11 June for 
th
`2400 and redeems the voucher of `2000 and settles the balance of `400 by cash. 
In this case, the time of supply is the date of redemption of voucher (i.e. 11
th
 June) as the supply 
is not identifiable at the point of issue of voucher. 
Residual Case 
As per 12(5) of CGST Act, where it is not possible to determine the time of supply under the 
provision of sub-section 2,3 or 4 the time of supply shall be :- 
• In a case where a periodical return has to be filed, be the date on which such return is to 
be filled or 
• In any other case be the date on which tax is paid. 
Page 3


 
Section 15 of CGST Act, 2017 explains value of taxable supply. Value of supply means the  
money that a seller would want to collect for the goods and services supplied. The amount 
collected by the seller from the buyer is the value of supply. But where parties are related and 
a reasonable value may not be charged, or transaction may take place as a barter or exchange; 
the GST law prescribes that the value on which GST is charged must be its ‘transactional 
value’. This is the value at which unrelated parties would transact in the normal course of 
business. It makes sure GST is charged and collected properly, even though the full value may 
not have been paid. 
Forward charge 
Forward charge (normal charge) or direct charge is the mechanism where the supplier of 
goods/services is liable to pay tax. 
For instance, if a chartered accountant provided a service to his client, the service tax will be 
payable by the chartered accountant; or for instance, if a car manufacturing company sold some 
auto parts to a trader and collected tax from the trader, the manufacturing company remits the 
tax. 
Under the current tax system, most transactions are covered under the forward charge 
mechanism. 
 
 
Reverse charge 
In the case of a reverse charge, the receiver of services is liable to pay the tax where the 
Government is empowered u/s 9(3) of the CGST Act to levy the tax. In the example of the 
chartered accountant (CA), the client would be liable, not the CA. Some services to which the 
reverse charge mechanism applies include goods transport agency services, legal services, rent-
a-car services, manpower supply services, import of taxable services, security services, service 
portion in execution of works contract, sponsorship services, etc. 
In India, currently, reverse charge is not applicable on goods except in a few states like Punjab, 
which has a purchase tax on certain goods. Now under GST, there will be a reverse charge on 
goods as well. 
The purpose of applying reverse charge is twofold: to increase compliance by unorganized 
sectors, such as transport, and to increase tax revenues. 
Vouchers for exchangeable goods 
Many firms or companies issue vouchers (or gift tokens) for the purchases made to promote 
their sales or employers give to their employees gift vouchers to be redeemed immediately or 
on a later date against any supply of goods or services. The vouchers are instruments that can 
be exchanged as payment of goods or services of the designated value. Therefore, it is important 
here to understand the time of supply in case of supply of vouchers in GST.  
As per 12(4) of CGST Act, in case of supply of vouchers by the supplier the time of supply 
shall be the:- 
• The date of issue of voucher if the supply is identifiable at that time or 
• The date of redemption of voucher in all the other cases (if not identifiable) 
Example: Suppose a cloth showroom sold gift voucher to a customer for `2000 on 10 May and 
th
the customer can purchase anything with the gift voucher. The customer purchases actual goods 
on 11 June for 
th
`2400 and redeems the voucher of `2000 and settles the balance of `400 by cash. 
In this case, the time of supply is the date of redemption of voucher (i.e. 11
th
 June) as the supply 
is not identifiable at the point of issue of voucher. 
Residual Case 
As per 12(5) of CGST Act, where it is not possible to determine the time of supply under the 
provision of sub-section 2,3 or 4 the time of supply shall be :- 
• In a case where a periodical return has to be filed, be the date on which such return is to 
be filled or 
• In any other case be the date on which tax is paid. 
Late Fees and Interest on GST Return 
Late fees and Interest forms important components of the GST payment and is incurred by 
business in case of delay in submitting or filing GST returns. As per Section 12(6) of CGST 
Act, 2017 relating to Time of Supply of Goods states that time of supply to the extent it relates 
to an addition in the value of supply by way of interest, late fee or penalty for delayed payment 
of any consideration shall be the date on which the supplier receives such addition in value. 
As per GST laws, the Late Fee is an amount charged for delay in filing GST returns. It can be 
referred to as an overdue fine. When a GST registered dealer misses filing GST Returns within 
the prescribed due dates, then some amount of late fees  charged. The late fee is also is
applicable for the delay in filing NIL returns. For example, there are no figures to declare for 
sales or purchases for the month of December 2018 in the GSTR-3B. Still, this return must be 
filed. The amount will depend upon the number of days of delay from the due date. GST return 
in GSTR-3B is filed on 23rd January 2019, 3 days after the prescribed due date i.e. 20th January 
2019. Late fees will be calculated for three days and deposited in cash. 
Example: Mr. A of West Bengal supplies a particular good for value of 2000000/- to Mr. ` B 
in Odisha on 07.01.2018. The terms of the payment are that Mr. B should make the payment 
within 60 days for the supply i.e. by 08.03.2018 and if Mr. B defaults in payment then interest 
@12 % p.a. would be chargeable for default in payment. The applicable GST rate on such item 
is say 18%. 
Now suppose Mr. B defaults and makes the payment of `2000000/- on 07.04.2018, thus he shall 
be liable to pay the interest for 30 days. Mr. A of West Bengal would be charging Mr. B of 
Odisha Interest @12% p.a. on 2000000/- for a period of 30 days amounting to 19,726.  ` `
Now Mr. A, should raise a debit note in the month of April 2018 under, sub-section (3) of 
section 34, to Mr. B of `19,726 charging IGST on the same @18% i.e. `3550.68/-.  Mr. A while 
filing his returns for the month of April 2018 would show particulars of this debit note in his 
return and would pay the IGST liability on submission of GSTR 3. 
Aggregate Turnover under G ST
Turnover, in common parlance, is the total volume of a business. The term ‘aggregate turnover’ 
has been defined in section 2(6) of the Act as follows:  
“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 
Page 4


 
Section 15 of CGST Act, 2017 explains value of taxable supply. Value of supply means the  
money that a seller would want to collect for the goods and services supplied. The amount 
collected by the seller from the buyer is the value of supply. But where parties are related and 
a reasonable value may not be charged, or transaction may take place as a barter or exchange; 
the GST law prescribes that the value on which GST is charged must be its ‘transactional 
value’. This is the value at which unrelated parties would transact in the normal course of 
business. It makes sure GST is charged and collected properly, even though the full value may 
not have been paid. 
Forward charge 
Forward charge (normal charge) or direct charge is the mechanism where the supplier of 
goods/services is liable to pay tax. 
For instance, if a chartered accountant provided a service to his client, the service tax will be 
payable by the chartered accountant; or for instance, if a car manufacturing company sold some 
auto parts to a trader and collected tax from the trader, the manufacturing company remits the 
tax. 
Under the current tax system, most transactions are covered under the forward charge 
mechanism. 
 
 
Reverse charge 
In the case of a reverse charge, the receiver of services is liable to pay the tax where the 
Government is empowered u/s 9(3) of the CGST Act to levy the tax. In the example of the 
chartered accountant (CA), the client would be liable, not the CA. Some services to which the 
reverse charge mechanism applies include goods transport agency services, legal services, rent-
a-car services, manpower supply services, import of taxable services, security services, service 
portion in execution of works contract, sponsorship services, etc. 
In India, currently, reverse charge is not applicable on goods except in a few states like Punjab, 
which has a purchase tax on certain goods. Now under GST, there will be a reverse charge on 
goods as well. 
The purpose of applying reverse charge is twofold: to increase compliance by unorganized 
sectors, such as transport, and to increase tax revenues. 
Vouchers for exchangeable goods 
Many firms or companies issue vouchers (or gift tokens) for the purchases made to promote 
their sales or employers give to their employees gift vouchers to be redeemed immediately or 
on a later date against any supply of goods or services. The vouchers are instruments that can 
be exchanged as payment of goods or services of the designated value. Therefore, it is important 
here to understand the time of supply in case of supply of vouchers in GST.  
As per 12(4) of CGST Act, in case of supply of vouchers by the supplier the time of supply 
shall be the:- 
• The date of issue of voucher if the supply is identifiable at that time or 
• The date of redemption of voucher in all the other cases (if not identifiable) 
Example: Suppose a cloth showroom sold gift voucher to a customer for `2000 on 10 May and 
th
the customer can purchase anything with the gift voucher. The customer purchases actual goods 
on 11 June for 
th
`2400 and redeems the voucher of `2000 and settles the balance of `400 by cash. 
In this case, the time of supply is the date of redemption of voucher (i.e. 11
th
 June) as the supply 
is not identifiable at the point of issue of voucher. 
Residual Case 
As per 12(5) of CGST Act, where it is not possible to determine the time of supply under the 
provision of sub-section 2,3 or 4 the time of supply shall be :- 
• In a case where a periodical return has to be filed, be the date on which such return is to 
be filled or 
• In any other case be the date on which tax is paid. 
Late Fees and Interest on GST Return 
Late fees and Interest forms important components of the GST payment and is incurred by 
business in case of delay in submitting or filing GST returns. As per Section 12(6) of CGST 
Act, 2017 relating to Time of Supply of Goods states that time of supply to the extent it relates 
to an addition in the value of supply by way of interest, late fee or penalty for delayed payment 
of any consideration shall be the date on which the supplier receives such addition in value. 
As per GST laws, the Late Fee is an amount charged for delay in filing GST returns. It can be 
referred to as an overdue fine. When a GST registered dealer misses filing GST Returns within 
the prescribed due dates, then some amount of late fees  charged. The late fee is also is
applicable for the delay in filing NIL returns. For example, there are no figures to declare for 
sales or purchases for the month of December 2018 in the GSTR-3B. Still, this return must be 
filed. The amount will depend upon the number of days of delay from the due date. GST return 
in GSTR-3B is filed on 23rd January 2019, 3 days after the prescribed due date i.e. 20th January 
2019. Late fees will be calculated for three days and deposited in cash. 
Example: Mr. A of West Bengal supplies a particular good for value of 2000000/- to Mr. ` B 
in Odisha on 07.01.2018. The terms of the payment are that Mr. B should make the payment 
within 60 days for the supply i.e. by 08.03.2018 and if Mr. B defaults in payment then interest 
@12 % p.a. would be chargeable for default in payment. The applicable GST rate on such item 
is say 18%. 
Now suppose Mr. B defaults and makes the payment of `2000000/- on 07.04.2018, thus he shall 
be liable to pay the interest for 30 days. Mr. A of West Bengal would be charging Mr. B of 
Odisha Interest @12% p.a. on 2000000/- for a period of 30 days amounting to 19,726.  ` `
Now Mr. A, should raise a debit note in the month of April 2018 under, sub-section (3) of 
section 34, to Mr. B of `19,726 charging IGST on the same @18% i.e. `3550.68/-.  Mr. A while 
filing his returns for the month of April 2018 would show particulars of this debit note in his 
return and would pay the IGST liability on submission of GSTR 3. 
Aggregate Turnover under G ST
Turnover, in common parlance, is the total volume of a business. The term ‘aggregate turnover’ 
has been defined in section 2(6) of the Act as follows:  
“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. 
In other words, the definition of aggregate turnover under revised GST u/s 2(6) states that the 
aggregate turnover shall include all taxable supplies, exempt supplies, exports of goods and/or 
services and inter-State supplies of a person having the same PAN. The word aggregate, simply 
means the total amount or sum of the above inclusions. Turnover means value of outward 
supplies of goods and services. The turnover is to be computed on all India bases and it shall 
exclude taxes. 
“Exempt Supply” means supply of any goods and/or services which are not taxable under this 
Act and includes such supply of goods and/or services which attract nil rate of tax or which 
may be exempt from tax u/s 11 or u/s 6 of the IGST Act, and includes non-taxable supply. 
Exempt supplies comprise the following 3 types of supplies: 
a. Supplies taxable at a ‘nil rate’ of tax 
b. Supplies that are wholly or partially exempted from CGST or IGST, by way of a 
notification 
c. Non-taxable supplies as defined u/s 2(78)  supplies that are not taxable under the act –
(i.e. alcoholic liquor for human consumption). 
The analysis / interpretation of definition for computing aggregate turnover are stated below: 
Turnover of all products - It is evident from definition that turnover of all the supplies whether 
taxable supplies, exempt supplies and exports should be aggregated to compute the limit of 20 `
Lakhs or 10 Lakhs. `
Turnover on basis of PAN - It is further provided that the aggregate turnover of person having 
Permanent Account Number (PAN) will be computed on all India bases. It means, if the person 
has branch in 3 different states then turnover of all the branches will be considered to compute 
the aggregate turnover. 
Value of turnover will not include the CGST, SGST and IGST charged on such supply - It is 
also provided in definition of aggregate turnover that the value of turnover will not include the 
CGST, SGST and IGST charged on such supply. Thus only transaction value computed as per 
section 15 of the CGST Act will be aggregated to compute the limit. 
Reverse charge and Inward Supplies - The taxable person may also be liable to pay the tax on 
reverse charge basis irrespective of the turnover. It is specifically mentioned in the definition 
that aggregate turnover will not include the value of supply on which tax is paid on reverse 
charge basis and the value of inward supplies. 
Page 5


 
Section 15 of CGST Act, 2017 explains value of taxable supply. Value of supply means the  
money that a seller would want to collect for the goods and services supplied. The amount 
collected by the seller from the buyer is the value of supply. But where parties are related and 
a reasonable value may not be charged, or transaction may take place as a barter or exchange; 
the GST law prescribes that the value on which GST is charged must be its ‘transactional 
value’. This is the value at which unrelated parties would transact in the normal course of 
business. It makes sure GST is charged and collected properly, even though the full value may 
not have been paid. 
Forward charge 
Forward charge (normal charge) or direct charge is the mechanism where the supplier of 
goods/services is liable to pay tax. 
For instance, if a chartered accountant provided a service to his client, the service tax will be 
payable by the chartered accountant; or for instance, if a car manufacturing company sold some 
auto parts to a trader and collected tax from the trader, the manufacturing company remits the 
tax. 
Under the current tax system, most transactions are covered under the forward charge 
mechanism. 
 
 
Reverse charge 
In the case of a reverse charge, the receiver of services is liable to pay the tax where the 
Government is empowered u/s 9(3) of the CGST Act to levy the tax. In the example of the 
chartered accountant (CA), the client would be liable, not the CA. Some services to which the 
reverse charge mechanism applies include goods transport agency services, legal services, rent-
a-car services, manpower supply services, import of taxable services, security services, service 
portion in execution of works contract, sponsorship services, etc. 
In India, currently, reverse charge is not applicable on goods except in a few states like Punjab, 
which has a purchase tax on certain goods. Now under GST, there will be a reverse charge on 
goods as well. 
The purpose of applying reverse charge is twofold: to increase compliance by unorganized 
sectors, such as transport, and to increase tax revenues. 
Vouchers for exchangeable goods 
Many firms or companies issue vouchers (or gift tokens) for the purchases made to promote 
their sales or employers give to their employees gift vouchers to be redeemed immediately or 
on a later date against any supply of goods or services. The vouchers are instruments that can 
be exchanged as payment of goods or services of the designated value. Therefore, it is important 
here to understand the time of supply in case of supply of vouchers in GST.  
As per 12(4) of CGST Act, in case of supply of vouchers by the supplier the time of supply 
shall be the:- 
• The date of issue of voucher if the supply is identifiable at that time or 
• The date of redemption of voucher in all the other cases (if not identifiable) 
Example: Suppose a cloth showroom sold gift voucher to a customer for `2000 on 10 May and 
th
the customer can purchase anything with the gift voucher. The customer purchases actual goods 
on 11 June for 
th
`2400 and redeems the voucher of `2000 and settles the balance of `400 by cash. 
In this case, the time of supply is the date of redemption of voucher (i.e. 11
th
 June) as the supply 
is not identifiable at the point of issue of voucher. 
Residual Case 
As per 12(5) of CGST Act, where it is not possible to determine the time of supply under the 
provision of sub-section 2,3 or 4 the time of supply shall be :- 
• In a case where a periodical return has to be filed, be the date on which such return is to 
be filled or 
• In any other case be the date on which tax is paid. 
Late Fees and Interest on GST Return 
Late fees and Interest forms important components of the GST payment and is incurred by 
business in case of delay in submitting or filing GST returns. As per Section 12(6) of CGST 
Act, 2017 relating to Time of Supply of Goods states that time of supply to the extent it relates 
to an addition in the value of supply by way of interest, late fee or penalty for delayed payment 
of any consideration shall be the date on which the supplier receives such addition in value. 
As per GST laws, the Late Fee is an amount charged for delay in filing GST returns. It can be 
referred to as an overdue fine. When a GST registered dealer misses filing GST Returns within 
the prescribed due dates, then some amount of late fees  charged. The late fee is also is
applicable for the delay in filing NIL returns. For example, there are no figures to declare for 
sales or purchases for the month of December 2018 in the GSTR-3B. Still, this return must be 
filed. The amount will depend upon the number of days of delay from the due date. GST return 
in GSTR-3B is filed on 23rd January 2019, 3 days after the prescribed due date i.e. 20th January 
2019. Late fees will be calculated for three days and deposited in cash. 
Example: Mr. A of West Bengal supplies a particular good for value of 2000000/- to Mr. ` B 
in Odisha on 07.01.2018. The terms of the payment are that Mr. B should make the payment 
within 60 days for the supply i.e. by 08.03.2018 and if Mr. B defaults in payment then interest 
@12 % p.a. would be chargeable for default in payment. The applicable GST rate on such item 
is say 18%. 
Now suppose Mr. B defaults and makes the payment of `2000000/- on 07.04.2018, thus he shall 
be liable to pay the interest for 30 days. Mr. A of West Bengal would be charging Mr. B of 
Odisha Interest @12% p.a. on 2000000/- for a period of 30 days amounting to 19,726.  ` `
Now Mr. A, should raise a debit note in the month of April 2018 under, sub-section (3) of 
section 34, to Mr. B of `19,726 charging IGST on the same @18% i.e. `3550.68/-.  Mr. A while 
filing his returns for the month of April 2018 would show particulars of this debit note in his 
return and would pay the IGST liability on submission of GSTR 3. 
Aggregate Turnover under G ST
Turnover, in common parlance, is the total volume of a business. The term ‘aggregate turnover’ 
has been defined in section 2(6) of the Act as follows:  
“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. 
In other words, the definition of aggregate turnover under revised GST u/s 2(6) states that the 
aggregate turnover shall include all taxable supplies, exempt supplies, exports of goods and/or 
services and inter-State supplies of a person having the same PAN. The word aggregate, simply 
means the total amount or sum of the above inclusions. Turnover means value of outward 
supplies of goods and services. The turnover is to be computed on all India bases and it shall 
exclude taxes. 
“Exempt Supply” means supply of any goods and/or services which are not taxable under this 
Act and includes such supply of goods and/or services which attract nil rate of tax or which 
may be exempt from tax u/s 11 or u/s 6 of the IGST Act, and includes non-taxable supply. 
Exempt supplies comprise the following 3 types of supplies: 
a. Supplies taxable at a ‘nil rate’ of tax 
b. Supplies that are wholly or partially exempted from CGST or IGST, by way of a 
notification 
c. Non-taxable supplies as defined u/s 2(78)  supplies that are not taxable under the act –
(i.e. alcoholic liquor for human consumption). 
The analysis / interpretation of definition for computing aggregate turnover are stated below: 
Turnover of all products - It is evident from definition that turnover of all the supplies whether 
taxable supplies, exempt supplies and exports should be aggregated to compute the limit of 20 `
Lakhs or 10 Lakhs. `
Turnover on basis of PAN - It is further provided that the aggregate turnover of person having 
Permanent Account Number (PAN) will be computed on all India bases. It means, if the person 
has branch in 3 different states then turnover of all the branches will be considered to compute 
the aggregate turnover. 
Value of turnover will not include the CGST, SGST and IGST charged on such supply - It is 
also provided in definition of aggregate turnover that the value of turnover will not include the 
CGST, SGST and IGST charged on such supply. Thus only transaction value computed as per 
section 15 of the CGST Act will be aggregated to compute the limit. 
Reverse charge and Inward Supplies - The taxable person may also be liable to pay the tax on 
reverse charge basis irrespective of the turnover. It is specifically mentioned in the definition 
that aggregate turnover will not include the value of supply on which tax is paid on reverse 
charge basis and the value of inward supplies. 
Supply on own account and on behalf of principal will be included - The clause (i) of 
Explanation to section 22 of CGST Act provides that in computing the aggregate turnover of 
supplies made by taxable person, whether on his own account or on behalf of principal needs 
to be computed. A person can make supply of goods on his own account and as an agent of 
principal also. As per clause (i) the value of both the supplies will be aggregated for the purpose 
of computing 20 Lakhs or 10 Lakhs. ` `
Supply of Goods by Principal after completion of Job Work - Clause (ii) of Explanation 
attached to section 22 of the CGST Act further provides that in computing the aggregate 
turnover, the supply of goods by registered job-worker after completion of job work shall be 
treated as supply of goods by principal and such turnover shall not be included in aggregate 
turnover of registered job-worker. As per clause (ii) the value of such supplies will be included 
in the turnover of principal for the purpose of computing 20 Lakhs or 10 Lakhs. ` `
This can be understood with the following example: 
Blue Star Limited has the following details for the year 2016-17: 
 
Intra-state supplies  4.00 lakhs `
Inter-state supplies  5.00 lakhs `
Non-taxable supplies 2.00 lakhs  `
Value of exports     0.70 lakhs `
Exempt supplies     0.60 lakhs `
IGST/CGST/SGST paid 0.20 lakhs `
Aggregate turnover = 4.00 + 5.00 + 0.7 + 0.6 = 10.30 lakhs. `
As per revised GST law, value of non-taxable supply shall not be considered while calculating 
aggregate turnover as it is not provided in definition of aggregate turnover. 
Exclusion from ‘aggregate turnover’ 
Aggregate turnover shall exclude the following sums: 
• Taxes, if any, charged under the CGST Act, SGST Act and IGST Act. 
• Value of inward supplies of goods and services on which tax is levied on reverse charge 
mechanism (RCM) 
• Value of inward supplies of goods and services 
Supplies made by job-worker on behalf of his principal 
Job-work implies 'job work' undertaking any treatment or process by a person on goods 
belonging to another registered taxable person and the expression 'job worker' shall be 
construed accordingly. Anybody who undertakes job-work is called a job-worker. Supply of