Turnover for Section 44AD, Income Tax

[Bipin Parmar]

Dear Experts,

What is the definition of 'Turnover' for the purpose of section 44AD? Does it include GST for the purpose of calculating 8% / 6% profit and ceiling limit of 2 crore?

Thanks & Regards

Bipin

Posts / Replies

[DR.MARIAPPAN GOVINDARAJAN]

In my view it is to be included. To the best of my knowledge there is no exemption given for this.

[Bipin Parmar]

Thank you sir for your reply.

I agree with your answer but I am unable to justify the grounds when I compare this opinion with the guidance note on Tax audit which excludes indirect taxes while calculating turnover.

[DR.MARIAPPAN GOVINDARAJAN]

The Guidance Note on tax audit issued by ICAI indicates that If sales tax and excise duty are included in the sale price, no adjustment in respect thereof should be made for considering the quantum of turnover. If we take this analogy GST is not to be included.

[Bipin Parmar]

I appreciate your reply.

Kindly clarify the below mentioned contradict provision stated in the guidance note on Tax audit, section 8A(1) of the Central Sales Tax Act provides that in determining turnover, deduction of sales tax should be made from the aggregate of sales price.

Thanks & Regards

Bipin