Service tax taken or not for 44ad purpouse (please reply its

This query is : Resolved

rajesh (Querist)
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28 March 2013 Dear Sir

In the FY - 2011 - 2012 I was doing a contract business and I am collected a Total Sum of Rs. 65,00,000/- out of which Contract Amount and Service tax is Rs. 58,93,019 and Rs. 6,06,981 respectively at this time I am Eligible for Opting Sec 44AD or my account compulsory Audited U/s 44AB because Contract amount + Service Tax is Crossed Tax Audit Thresh hold 58,93,019+6,06,981=65,00,000

Please tell
Its urgent
Thanking you

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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28 March 2013 So Many are having same doubt in this regards.

If you charging and collecting service tax amount separately in your bill and accounting separetly for service tax then service tax amount shall be excluded for th purpose of turnover otherwise it shall be considered for turnover.

For example: If your invoice/bill format is as follows

Contract amount or charges XXXX

Add: Service tax XXX

Total XXXX

And your accounting is as follows

Mr.X(contractee)
To contract fee a/c
To service tax a/c

Then you need not to consider service tax for turnover purpose. In case you fail to do any one of the above or both then you have to consider service tax for turnover purpose.

OM SAI SRI SAI JAI JAI SAI

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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28 March 2013 Its Depend on Your Accounting.

If however, the service tax recovered are credited separately to service tax (being separate accounts) and payments to the authority are debited in the same account, they would not be included in the turnover.

if No Separate Account for Service Tax The Its to be Included.

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CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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28 March 2013 The term `turnover' would mean the total sales after deducting therefrom goods returned, price adjustments, trade discount and cancellation of bills for the period of audit, if any. Adjustments which do not relate to turnover should not be made e.g. writing off bad debts,royalty etc. Where excise duty is included in turnover, the corresponding amount should be distinctly shown as a debit item in the profit and loss account.”