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Whether turnover includes taxes as per companies act ?

Others 1672 views 6 replies

Hello Professional Collegues,

As per Companies Amendment Act 2017,  Section 2(91) "turnover" means the gross amount of revenue recognised 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;'.

Does the above definition includes taxes charges ?

Thanks in advance.

Replies (6)
Turnover is always calculated by excluding the taxes paid
Yes... I agreed to Ms Vatsla Alagh.,

Turn Over Calculated Exclude for the Taxes.
Dear Both, Some legal interpretation says that it should be interpreted as follows: "Gross amount".....of revenue recognised in PL account. i.e GROSS amount. Confusion arises because revenue recognised in PL is net of taxes and they are asking for Gross amount. Please help with your view.
@ saumil-If it is inclusive of taxes, then no tax payable or receivable would have be shown in financials.. So here turnover is exclusive of taxes

Vatsla, just to let you know I consulted legal experts and they are of the opinion that as Schedule-III is applicable which states that 

Revenue from Operations less: Excise Duty/GST i.e Net Revenue disclosed in PL account.

Hence provision is of view to take Gross Amount rather than Net. i,e Including Taxes.

Thanks for yout time.

So u mean to say turnover as per companies act is amount inclusive of taxes and for the purpose of financials, amount shown as revenue in PL is exclusive of taxes.. Right?


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