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gross profit ratio
In a commodity business there is no fixed rate of profit ... every year turnover may increase but the profit doesn't becoz there will price variations daily... at this point how should we keep the profit ratio .... if we show less profit ratio is there a chance of getting scrutiny
Replies (7)
You are trading for own or working as agent?
No for own we purchase cotton and process(ginning) it. later we sell it as cotton seeds and cotton lint ... even we do trading in that like purchasing cotton lint from others and selling it to others.. but trading shows heavy transaction becoz for one bill of cotton lint values 20 lakhs but profit may be only 10 thousand rs
It means you are doing manufacturing and trading in cotton seeds and cotton lint? Did you take the registration under GST? And You are maintaining books of accounts?
yes our transaction is 48cr this year...
Than you need to make your expenses proportionately, as you are showing trading profit and manufacturing profits separately.
we are not showing profit separetly
Scrutiny is not depend only on GP, it depends upon many things, Expenses incurred suddenly in particular year in particular expense, increase in any expenses not-evenly etc.
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