Chartered Accountant · ICAI M.No. 153926 · FRN 136869W · Reviewed on 7 October 2026
The income-tax answer: follow the books
ICAI’s tax-audit guidance ties “turnover” to your accounting treatment. Exclusive method — sales booked net, GST parked in a liability account — keeps GST out of turnover for the 44AB thresholds. Inclusive method — GST passing through the sales ledger — pulls it in. (Section 145A’s inclusive valuation governs computing income, not this threshold test.) A ₹95-lakh-net business at 18% GST is ₹1.12 crore gross — the method literally decides whether you are audited, so keep the exclusive method and keep it consistently.
GST’s “aggregate turnover” is a different animal
For GST purposes — registration thresholds, composition eligibility, e-invoicing applicability — aggregate turnover under section 2(6) excludes GST itself but includes exempt supplies, exports and inter-state stock transfers, measured PAN-wide across all GSTINs. A business can therefore be under the 44AB line yet over the e-invoicing line, or vice versa. Never recycle one turnover figure across the two statutes.
Where this bites
The classic notices: 44AB applicability computed on GST-inclusive sales by a new accountant (audit demanded where none was due, or vice versa); 44AD presumptive income offered on the inclusive figure (overpaying tax on the GST component); and e-invoicing applicability missed because exempt supplies were ignored in aggregate turnover. One reconciliation sheet — books turnover vs GSTR-1 vs aggregate turnover — settles all three. It is a standard working paper in our tax-audit practice.