ACCOUNTS TO BE AUDITED UNDER DGST IN CERTAIN CASES

               ACCOUNTS TO BE AUDITED UNDER DGST IN CERTAIN CASES

• Dealers eligible for audit

Where in any particular year, gross turnover of a dealer exceeds Rs. 40 lakhs or such other amount as may be prescribed by the law, then, such dealer shall get his accounts in respect of such year audited by an accountant.

• Who is required to Audit the accounts?

Audit can be carried out by any of the following:

1. Chartered accountant;
2. Person who by virtue of section 226(2) of the Co. Act, 1956, is entitled to be appointed to act as an auditor of companies registered; or
3. Cost accountant; or
4. Person referred to in sec 619 of the Co. Act, 1956.

• Dealer require to obtain audit report

Dealers shall obtain an audit report within a period of 9 months from the end of such year duly signed and verified by such accountant and also such particulars as may be prescribed u/s 44AB of the IT Act, 1961.

                                            

• Time limit for furnishing of audit report

Audit report shall be furnished by such dealer to the Commissioner within 28 days from the end of the tax period ending on 31st Dec of the following year, i.e. 28th Jan of the following year.

• Audit report u/s 44AB is a sufficient compliance

In a case where the dealer is required u/s 44AB of the IT Act, 1961 to get his accounts audited, it shall be sufficient compliance with the provisions of audit under aforesaid section, if such dealer gets his accounts audited under the said sec 44AB of the IT Act, 1961. A true copy of report u/s 44AB of the IT Act, 1961 shall be furnished to the Commissioner.

NOTE: In IT Act, assessee is required to get tax audit u/s 44AB if its turnover exceeds Rs. 40 Lacs. Thereby only audit report in form no. 3CD would suffice even for audit under this section.

1.6         How to calculate turnover?

Lets us now understand the meaning of term Turnover used above.

Particulars	Amount
(i)                Aggregate of the amounts of sale price	xxx
(ii)              Add: the amount of tax, if any, for which the dealer is liable u/s 3 of DGST Act. (This is to be added only if it is not already included in (i) above.)	xxx
(iii)             Add: in relation to the delivery of goods on hire purchase or any system of payment by installments, the amount of valuable consideration payable to a person for such delivery including hire charges, interest and other charges incidental to such transaction. (This is to be added only if it is not already included in (i) above.)	xxx
(iv)             Add: in relation to transfer of the right to use any goods for any purpose (whether or not for a specified period) the valuable consideration or hiring charges received or receivable for such transfer. (This is to be added only if it is not already included in (i) above.)	xxx
(v)              Add: any sum charged for anything done by the dealer in respect of goods at the time of, or before, the delivery thereof. (This is to be added only if it is not already included in (i) above.)	xxx
(vi)             Add: amount of duties levied or leviable on the goods under the Central Excise Act, 1944 or the Customs Act, 1962, or the Punjab Excise Act, 1914 as extended to the National Capital Territory of Delhi whether such duties are payable by the seller or any other person. (This is to be added only if it is not already included in (i) above.)	xxx
(vii)            Add: amount received or receivable by the seller by way of deposit (whether refundable or not) which has been received or is receivable whether by way of separate agreement or not, in connection with, or incidental to or ancillary to the sale of goods. (This is to be added only if it is not already included in (i) above.)	xxx
(viii)          Add: in relation to works contract means the amount of valuable consideration paid or payable to a dealer for the execution of the works contract. (This is to be added only if it is not already included in (i) above.)	xxx
(ix)             Less: any sum allowed as discount which goes to reduce the sale price according to the practice, normally, prevailing in trade.	(xxx)
(x)              Less: the cost of freight or delivery or the cost of installation in cases where such cost is separately charged; and the words “purchase price” with all their grammatical variations and cognate expressions, shall be construed accordingly.	(xxx)
(xi)             Less: any tax for which the person is liable under section 3 of DGST Act.	(xxx)
TURNOVER	XXXX

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