Tax audit turnover definition
This query is : Resolved
25 July 2018
Mr. A is a dealing in items which bears heavy cess on it under GST (For eg. Tobacco). In the current year his taxable turnover under GST was Rs. 50 Lakhs on which he has paid GST including cess of Approx. 62 Lakhs. What will be his turnover under Income Tax Act. (Kind attention sec 145A which says -
the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head “Profits and gains of business or profession” shall be— (i) in accordance with the method of accounting regularly employed by the assessee; and (ii) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation.
Kindly reply soon.
the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head “Profits and gains of business or profession” shall be— (i) in accordance with the method of accounting regularly employed by the assessee; and (ii) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation.
Kindly reply soon.
25 July 2018
I further want to know whether Mr. A will be liable for tax audit or he can file return u/s 44AD.
25 July 2018
"If the sales tax/VAT and excise duty are included in the sale price no adjustment in respect thereof should be made for considering the quantum of turnover. If however, the excise duty and/or Sales Tax Account (being seperate Accounts) and payments to the authority (i.e payment of sales tax/VAT and excise duty with the treasury)are debited in the same account, they would not be included in the turnover."
44AD can be opted.
44AD can be opted.
30 July 2018
Agree with the Expert. please also have a look on the deinition of TURNOVER given in Guidance Note for tax audits u/s 44AB by ICAI
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