08 June 2009
Section 44AB says "sales, trunover or gross receipts exceeding 40L". As per the bare reading it should be gross trunover i.e inclusive or service tax.
Interpritation can also, as the amount of indirect taxes are collected on behalf of govt. it can not be added to trunover for the purpose of tax audit applicability u/s 44AB.
My view : Service tax, VAT, Excise duty etc should not be added to trunover for the purpose of section 44AB.
08 June 2009
The words sales, turnover and gross receipts are commercial terms and they should be construed in accordance with the method of accounting regularly employed by the assessee. If the tax collected is credited separately to sales tax account and payments thereof are debited in the same account, they would not be included in the turnover. Refer page No. 8 of " Issues on tax audit " by Fiscal laws committee of ICAI.
08 June 2009
Yes, it is the method of accounting followed by the assessee whereby the sales or turnover may be determined. In case inclusive method is being followed then sales/turnover/gross receipt will include VAT/ST/Excise etc otherwise not.
CAclubindia
