Turnover for Section 44AD

[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

[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

AI Summary

Turnover definition under section 44AD: whether GST forms part of turnover affects presumptive taxation computation. Whether turnover for section 44AD includes GST is disputed: one view treats GST as part of turnover for computing presumptive profit and the turnover ceiling, while the Guidance Note on tax audit and analogous Central Sales Tax deduction provisions suggest indirect taxes included in sales price should be excluded from turnover when computing presumptive income.