Chartered Accountant
4780 Points
Joined March 2009
A turnover tax is similar to a sales tax or a VAT, with the difference that it taxes intermediate and possibly capital goods. It is anindirect tax, typically on an ad valorem basis, applicable to a production process or stage. For example, when manufacturing activity is completed, a tax may be charged on some companies. Sales tax occurs when merchandise has been sold.
In South Africa, the turnover tax is a simple tax on the gross income of small businesses. Businesses who elect to pay the turnover tax are exempt from VAT. Turnover tax is at a very low rate compared to most taxes, but it is calculated on gross income without any deductions.[1]
Turnover tax is not applicable in India.
Regards,
Devendra