Defenition of Gross Turnover / Gross Receipts u/s 44AB
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
07 July 2011
Whether Gross Turnover /Gross receipt includes Taxes seperately charged (e.i. VAT / CST / Service Tax / Excise)
08 July 2011
As per my view, For deciding Gross Turnover /Gross receipts taxes separately charged are required be included. VAT, CST, ST etc are received along with the payment of goods and are as such forming part of the total sales consideration. No body is receiving a separate cheque for VAT...etc.
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As per ICAI guidelines "Gross Turnover" and "Net Turnover" terms are used to distinguish the Gross sales and
Gross Sales Less Sales Returns & Less Trade Discounts.
As usual it does not clarify any thing further.
*
However Section 145A of the Income Tax Act 1961, requires further adjustments for taxes actually paid or incurred to bring the goods at that location while valuation of inventory is done.
These further adjustments are required after considering the method of accounting being regularly followed by the assessee.
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From Section 145A, Income Tax Act it is clear that department will have no objection if inclusive method is followed in preparing accounts.
It is the spirit of the assessee only which searches the sideways to escape.
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"Gross" is a term which includes all in it. If any thing has been deducted from it it will be net of...... and accordingly I opine that Gross Turnover includes VAT etc.
*
As per ICAI guidelines "Gross Turnover" and "Net Turnover" terms are used to distinguish the Gross sales and
Gross Sales Less Sales Returns & Less Trade Discounts.
As usual it does not clarify any thing further.
*
However Section 145A of the Income Tax Act 1961, requires further adjustments for taxes actually paid or incurred to bring the goods at that location while valuation of inventory is done.
These further adjustments are required after considering the method of accounting being regularly followed by the assessee.
*
From Section 145A, Income Tax Act it is clear that department will have no objection if inclusive method is followed in preparing accounts.
It is the spirit of the assessee only which searches the sideways to escape.
*
"Gross" is a term which includes all in it. If any thing has been deducted from it it will be net of...... and accordingly I opine that Gross Turnover includes VAT etc.
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