25 August 2011
may i know any notification or guidance etc for reference..as i knw In the "Guidance Note on Terms used in Financial Statements" published by ICAI, "the expression "Sales Turnover" has been defined as : "The aggregate amount for which sales are effected or services rendered by an enterprises. The term 'gross turnover/sales' and 'net turnover/sales' are sometimes used to distinguish the sales aggregate before and after deduction of returns and trade discounts"
In the statement issued by ICAI on the companies (Auditors' Report) Order 2003 the word 'turnover' has been defined as under- "The term 'turnover' for the purposes of this clause may be interpreted to mean the aggregate amount for which sales are effected or services rendered by an enterprises" Whether sales tax and excise duty to be included in the sales/turnover: In our opinion same should be included even if Assessee is have not included the same in Profit and Loss account and shown the same as current Liability. Section 145A of the Income Tax Act,1961 states that purchase , sale and inventory shall be valued by taking into account the amount of any tax, duty, cess or fee . An extract of section 145A is as follows: 145A. Notwithstanding anything to the contrary contained in section 145, (a) the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head Profits and gains of business or profession shall be (i) in accordance with the method of accounting regularly employed by the assessee; and (ii) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation. Explanation.For the purposes of this section, any tax, duty, cess or fee (by whatever name called) under any law for the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment.
Therefore , in my opinion , maintaining accounts of excise duty VAT separately is not correct in terms of section 145A of the I T Act. In that sense , for determining the meaning of the word “sales turnover” VAT or excise duty should also be considered for purpose determining the criteria for getting accounts audited u/s 44AB of the I T Act.
26 August 2011
may i know any notification or guidance etc for reference..as i knw In the "Guidance Note on Terms used in Financial Statements" published by ICAI, "the expression "Sales Turnover" has been defined as : "The aggregate amount for which sales are effected or services rendered by an enterprises. The term 'gross turnover/sales' and 'net turnover/sales' are sometimes used to distinguish the sales aggregate before and after deduction of returns and trade discounts"
In the statement issued by ICAI on the companies (Auditors' Report) Order 2003 the word 'turnover' has been defined as under- "The term 'turnover' for the purposes of this clause may be interpreted to mean the aggregate amount for which sales are effected or services rendered by an enterprises" Whether sales tax and excise duty to be included in the sales/turnover: In our opinion same should be included even if Assessee is have not included the same in Profit and Loss account and shown the same as current Liability. Section 145A of the Income Tax Act,1961 states that purchase , sale and inventory shall be valued by taking into account the amount of any tax, duty, cess or fee . An extract of section 145A is as follows: 145A. Notwithstanding anything to the contrary contained in section 145, (a) the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head Profits and gains of business or profession shall be (i) in accordance with the method of accounting regularly employed by the assessee; and (ii) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation. Explanation.For the purposes of this section, any tax, duty, cess or fee (by whatever name called) under any law for the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment.
Therefore , in my opinion , maintaining accounts of excise duty VAT separately is not correct in terms of section 145A of the I T Act. In that sense , for determining the meaning of the word “sales turnover” VAT or excise duty should also be considered for purpose determining the criteria for getting accounts audited u/s 44AB of the I T Act.
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