If any proprietor is having billing of Rs 38,00,000 (excluding service tax) and after addition of service tax the same crosses 40 lakh thresold. Then in such a case is the assessee liable under section 44AB. Is the service tax recovered on services rendered a part of turnover or gross receipt for the purpose of Tax Audit.
23 March 2010
Depends on the method of accounting regularly followed. If service tax collected is separately accounted and service tax payment is also debited to that account, tax portion will not form part of turnover for the purpose of determining the threshold limit of section 44AB of the IT Act,1961.
For more details refer "Issues On Tax Audit" an ICAI publication.
23 March 2010
In page 8 of the publication (June 2000 edition)cited by me, there is a question similar to the one raised by the querist in the context of sales tax for which the ICAI had given an opinion similar to my earlier reply.
23 March 2010
The guidance Note on tax Audit also suggest the same as suggeted By Mr Warrior.......i.e. depend on : Whether inclusive or exclusive method of accounting Service tax is followed. Refer para 5.6 of Guidance note on Tax Audit
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