Whether Turnover includes GST or Not
This query is : Resolved
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30 November 2022
My query is that Companies Act talks about adding gst to turnover, but CBDT considers it wrong to add gst to turnover. If I maintain the turnover according to the Companies Act, can there be any problem tomorrow from any department?
30 November 2022
Generally, assesses maintain GST ledger separately, as the same is collected on behalf of Government.
For GST and Income tax returns the GST figures are required separately, and turnover for IT & GST is always exclusive of GST.
For GST and Income tax returns the GST figures are required separately, and turnover for IT & GST is always exclusive of GST.
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30 November 2022
Sir, any specific section under Company Act 2013 or any legal case in favoring your remark sir Dhirajlal Rrambhia....
30 November 2022
The Central Goods and Services Act, defines ‘Turnover’ as under:
Section 2(112)
‘turnover in State’ or ‘turnover in Union territory’ means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and inter-State supplies of goods or services or both made from the State or Union territory by the said taxable person but EXCLUDES central tax, State tax, Union territory tax, integrated tax and cess.
Section 2(112)
‘turnover in State’ or ‘turnover in Union territory’ means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and inter-State supplies of goods or services or both made from the State or Union territory by the said taxable person but EXCLUDES central tax, State tax, Union territory tax, integrated tax and cess.
30 November 2022
The term "Turnover" has been defined under Section 2(91) of the
Companies Act, 2013 as follows:
"2(91) turnover means gross amount of revenue recognized in the profit and loss account from the sale, supply, or distribution of goods or on account of services rendered, or both, by a company during a financial year;"
Companies Act, 2013 as follows:
"2(91) turnover means gross amount of revenue recognized in the profit and loss account from the sale, supply, or distribution of goods or on account of services rendered, or both, by a company during a financial year;"
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30 November 2022
In the “Guidance Note issued by ICAI on Terms Used in Financial Statements” published by the Institute, the expression “Sales Turnover” (Item 15.01) has been defined as under:
“The aggregate amount for which sales are effected or services rendered by an enterprise. The term `gross turnover’ and `net turnover’ (or `gross sales’ and `net sales’) are sometimes used to distinguish the sales aggregate before and after deduction of returns and trade discounts”.
Nowhere it is mentioned That 'Turnover includes taxes like GST...'
“The aggregate amount for which sales are effected or services rendered by an enterprise. The term `gross turnover’ and `net turnover’ (or `gross sales’ and `net sales’) are sometimes used to distinguish the sales aggregate before and after deduction of returns and trade discounts”.
Nowhere it is mentioned That 'Turnover includes taxes like GST...'
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30 November 2022
Extrat from: ... Concept & Meaning of Turnover in Tax Audit R.S. Kalra | Income Tax - Articles
Read more at: https://taxguru.in/income-tax/concept-meaning-turnover-tax-audit.html
"From the above discussion, it can be concluded that the amount of GST in such cases need to be ignored for the following reason: (a) While collecting the GST, Assessee is acting as an agent of the Government and not on his own account. (b) Section 145A begins with the word “For the purpose of determining the income chargeable under the head “Profits and gains of business or profession” which makes this provision inapplicable for other purposes. In short, for the purpose of section 44AD, 44AB, 44ADA, this treatment is not relevant. (c) The amount of GST is debited / credited to altogether different accounts which are now forming the part of the Credit side of Profit & Loss Account. The issue is controversial for the simple reason that section 145A provides for its inclusions. Unless the CBDT clarifies the meaning of the word “turnover”, the issue would remain controversial and disputable."
Read more at: https://taxguru.in/income-tax/concept-meaning-turnover-tax-audit.html
"From the above discussion, it can be concluded that the amount of GST in such cases need to be ignored for the following reason: (a) While collecting the GST, Assessee is acting as an agent of the Government and not on his own account. (b) Section 145A begins with the word “For the purpose of determining the income chargeable under the head “Profits and gains of business or profession” which makes this provision inapplicable for other purposes. In short, for the purpose of section 44AD, 44AB, 44ADA, this treatment is not relevant. (c) The amount of GST is debited / credited to altogether different accounts which are now forming the part of the Credit side of Profit & Loss Account. The issue is controversial for the simple reason that section 145A provides for its inclusions. Unless the CBDT clarifies the meaning of the word “turnover”, the issue would remain controversial and disputable."
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