Do we include Indirect Taxes like VAT, Service Tax etc for the purpose of computing Turnover under Section 44AD?
7 Replies
Suresh Pai S
(Tax Consultant)
(1029 Points)
Replied 17 January 2017
Taxes are not to be included in turnover. They are current liabilities to be remitted to the tax authorities.
saurabh shahu
(Audit Assistant)
(142 Points)
Replied 17 January 2017
Assume that Whether Assesse is a Compostion Dealer under MVAT Act. so the Same amt should be Incorporate for Presumtive Taxation under Income Tax Act.
Koushik D C
(Proprietor/Freelancer)
(938 Points)
Replied 17 January 2017
If sales tax and excise duty are included in the sale price, no adjustment in respect thereof should be made for considering the quantum of turnover.
If however, the excise duty or sales tax recovered are credited separately to Excise duty or sales tax a/c [being separate accounts] and payment to the authority are debited in the same account, they would not be included in the turnover.
[Source - GN of ICAI]
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(178099 Points)
Replied 17 January 2017
Here the query is specifically related to Turnover as related to section 44AD.
As per section 44AD:: Total Turnover / Gross Receipts are amount received/receivable from clients in respect of sale of Previous Year.
What are the receipts which forms Part of Turnover?
1) Sales Tax, excise duty, Cess, and other Levy.
2) Sales of unusables empties and Packages.
3) Service Charges charged for delivery
Then what are the Receipts which does not form Part of Turnover?
1) Sale of Property, Plant and equipments
2) Advance received from customers, deposits Received or retention money.
3) Any Security, retention or other deposit obtained from employees.
4) Interest Income or other similar receipts
5) Value of Inventory
Koushik D C
(Proprietor/Freelancer)
(938 Points)
Replied 17 January 2017
Agree with your explanations but section 44AD does not defines the Total Turnover / Gross Receipts
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