Meaning of turnover

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2015 What is the meaning of turnover for tax audit purpose when the assessee is engaged in Forex Business i.e. money changers who hold valid license from RBI and sale and purchase foreign currency to and from persons visiting India.

Amol S Joglekar

Amol S Joglekar (Expert)
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06 September 2015 the purchases and sales are made in INR.
The total of sales can be taken as Turnover.

Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2015 Thanks Mr. Amol for your reply

But profit in this kind of business is very low and there is only sale and purchase of currency. Whether guidance note on tax audit has covered anything on this subject. Or can you tell me the basis on which you suggested to make total of sale and consider it as turnover.

Amol S Joglekar

Amol S Joglekar (Expert)
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09 September 2015 I think I am falling short of understanding your query.

See, if say one USD is bought for INR 65.35 and sold for 67.30

67.30 is turnover (Sales) and 65.35 is purchases

Can you please ask your query with respect to these figures?

Querist : Anonymous

Querist : Anonymous (Querist)

10 September 2015 Yes Mr. Amol

As per your earlier reply, here turnover is Rs. 67.30. But in my opinion turnover is RS. 1.95 i.e. net of sale and purchase rate.

Amol S Joglekar

Amol S Joglekar (Expert)
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12 September 2015 Assessee is money changer having valid liscence from RBI.
Assessee is authorised to buy and sell all types of currencies.
Buyer and seller of a currency are not necessarily the one and same person.
Buyers are separate from Sellers of FX.
Hence there is no any NEXUS why you think NET of purchase and sale rate is turnover.

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