Practice
1865 Points
Joined August 2012
According to ICAI, the following items should be deducted/excluded from turnover :
• Ancillary charges-packing, freight, forwarding, interest, commission etc. (unless where separate demarcation of these charges is not possible due the method of accounting followed by the assessee or where company does not show these charges separately in its bill/invoice).
• Cancellation of bills for the period under audit.
• Cash discount allowed in cash memo/sales invoice.
• Price adjustments.
• Price of goods returned (whether returns are from the sales of an earlier period or current period).
• Sales proceeds of any shares, securities, debentures, etc. held as investment.
• Sales proceeds of fixed assets (as these are not held for resale).
• Sales proceeds of investment property. Special rebate allowed to customer (not being in the nature of commission on sales).
• Stocks surrendered during a survey-value thereof.
• Trade discount allowed in sales invoice.
• Turnover discount (discount allowed if sales to customer exceeds a particular quantity) even if it is allowed periodically by separate credit notes.
• VAT recovered/recoverable from customers - (as per Item 1 of Part A - P&L of Form ITR 4/ITR 5/ITR 6 & ICAI's Guidance Note on Accounting for State-level VAT).