Turnover for presumptive Taxation U/S 44AD with or without GST?

Turnover for presumptive Taxation U/S 44AD with or without GST? How to calculate Turnover for presumptive Taxation U/S 44AD? Is it with or without GST? What is the Definition of Turnover as per the Income Tax Act? Now the term turnover/sale etc. is not defined in the Income Tax Act. So let us refer some other sources where we can find the meaning of Turnover/Sales. [caption id="attachment_91994" align="aligncenter" width="800"] Turnover for presumptive Taxation U/S 44AD with or without GST?[/caption]

GST Act 2017

Section 2(112) ―turnover in State or ―turnover in Union territory means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and interState supplies of goods or services or both made from the State or Union territory by the said taxable person but excludes central tax, State tax, Union territory tax, integrated tax, and cess;

Companies Act 2013

Section (91) "turnover" means the gross amount of revenue recognized 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.

Guidance Note on Tax Audit under Section 44AB of the Income-tax Act, 1961 by ICAI

“The aggregate amount for which sales are effected or services rendered by an enterprise. The term "gross turnover" and "net turnover" (or "gross sales" and "net sales") are sometimes used to distinguish the sales aggregate before and after deduction of returns and trade discounts”.

Now how we can determine if GST should be included while calculating Turnover for Tax Audit?

Section 145A. For the purpose of determining the income chargeable under the head "Profits and gains of business or profession",— (i) ... (ii) the valuation of purchase and sale of goods or services and of inventory shall be adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods or services to the place of its location and condition as on the date of valuation;

Discussions:

• As per Section 145A, for calculating Valuation of Sale of Goods/Services amount of any tax, duty, cess, or fee shall be included in the valuation of sale.
• But the purpose of this section is for determining the income chargeable under the head Profits and gains of business or profession [PGBP].
• This makes the provision inapplicable on Section 44AD
• Also, GST is collected by a taxpayer on account of the Government. The same is required to be paid to the government.
• And therefore it cannot form part of the turnover.
• But these are my personal views and the issue would remain debatable unless CBDT Clarifies the same.