Regarding Defination of Turnover!!

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This query is : Resolved

CA.Alka (Querist)

16 April 2010 One of my clients is into the business which falls under 194C

would like to confirm the following:

If he is following cash method of accounting then for the purpose of calculating turnover,i take into account only gross receipts (deposits in bank account)

Now,service tax (ST)is applicable to him so in the ST return i would have to show turnover as actual sales billed during that year

Am i right??
Please confirm the above

Regards
Alka

PS:If anyone has any suggestions as to how to account in tally (cash based accounting vis-a-vis Service tax records) then please share it..

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

16 April 2010 If the entire cash received against services is deposited in bank, gross receipts of the business can be taken as the sum of bank deposits under cash system of accounting.
In ST-3 there are two clauses, one to show the value of bills raised during each month covered in the return period and the other to show the amount received in each month on which ST is collected/paid. Here again under cash system of accounting, the gross receipts determined as above and the amounts shown as received in the ST-3 form should necessarily tally.

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CA.Alka

CA.Alka (Querist)

17 April 2010 Thank you Sir..!!

CA.Alka

CA.Alka (Querist)

17 April 2010 Can anyone tell me how to advice clients to keep records of cash system for IT purpose vis--vis merchantile system for service tax purpose(since in ST we have to show value of sales billed)

My view is to account in tallyand excel both and record all the sales and receipt account..

in the excel sheet reverse the debtors account and prepare cash based PL

Anyone having another view please share