QUESTION

Inverted Refund what is Value of Adjusted total Turnover. Inverted Turnover = 5,00,000/- Zero Rated Turnover = 2,00,000/- Please Explain what is Adjusted total turnover.

ANSWER

Facts of the case:

Definition of Adjusted total turnover in case of refund for Inverted tax Structure

Law applicable:

Rule 89 of CGST Rules:
(E) Adjusted Total Turnover" means the sum total of the value of-
(a) the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the turnover of services; and
(b) the turnover of zero-rated supply of services determined in terms of clause (D) above and non-zero-rated supply of services, excluding-
(i) the value of exempt supplies other than zero-rated supplies; and
(ii) the turnover of supplies in respect of which refund is claimed under sub-rule (4A) or sub-rule (4B) or both, if any, during the relevant period.
SECTION 2 OF CGST ACT

(112) 'turnover in State' or 'turnover in Union territory' 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) 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;

Interpretation:
The definition of Adjusted total turnover is given in Sub Rule (4) of Rule 89 of CGST Rules which defines Adjusted Total Turnover means the sum total of the value of the turnover of supply of goods and services as reproduced above.

Conclusion:
Adjusted total turnover for refund of inputs in case of Inverted tax structure is sum total of Inverted turnover and zero rated turnover. (Reply dt. 01/11/2021)