Calculation of turnover for purpose of tax audit limit

This query is : Resolved

Hiral (Querist)
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30 July 2013 Dear Sir,

some confusion after refering guidance note on Tax Audit u/s 44AB released recently :
1.
Hypothetically, If someone has turnover of rs. 1,03,00,000 and out of which rs 5,00,000 is VAT Amount (Assessee follows inclusive method for VAT Accounting) , than is there any liability for Tax Audit u/s 44AB ?
2.
Will case be reversed if
Assessee does not follow inclusive method for VAT Accounting,
And Sales Amount is Rs. 97,00,000 and VAT account of rs. 7,00,000 is shown as liability in balance sheet

pls help

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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30 July 2013 for the purpose of sec44AB you need to check the gross turnover.

Gross means without deducting anything for gross figure.

Hiral

Hiral (Querist)
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31 July 2013 pls clarify what is written in para 5.7 on page no. 21 in guidance note on Tax Audit

link :

https://220.227.161.86/30357dtc19988.pdf

"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 enterprise. 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. Trade discounts can be deducted from sales but
not the commission allowed to third parties. If, however, the Excise duty an /
or sales tax recovered are credited separately to Excise duty or Sales tax
Account (being separate accounts) and payments to the authority are
debited in the same account, they would not be included in the turnover"

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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01 August 2013 YES if sales tax and excise duty is treated sep i.e dr or cr sep and not adj in sales then do not include it in the gross turnover.

in normal case it is included in turnover and no sep adj is made.

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