Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
GST is generally excluded
When testing the tax-audit turnover limit, the question is whether the GST you collected counts as ‘turnover’. The ICAI’s guidance is that GST collected on behalf of the government, shown separately on invoices, is not part of turnover — because it’s a pass-through, not your income. So turnover is generally taken net of GST.
Where care is needed
The position can vary where billing is composite/indivisible (GST not separately shown), or for certain presumptive computations, and the treatment of other indirect levies may differ. Because crossing the audit limit by a small margin can decide whether an audit applies, it’s worth confirming the exact computation. Confirm the treatment for your billing pattern.
A worked example
Example: a trader bills ₹1.05 crore inclusive of ₹15 lakh GST shown separately — turnover for the audit limit is ₹90 lakh (net of GST), keeping him below a ₹1 crore threshold. Had GST been wrongly included, he’d have thought himself over the limit. Getting this right avoids both an unnecessary audit and a missed one. Our team can compute your turnover correctly for the audit test.