Cash payment in excess of 35000/- to lorry union

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Satish Makam (Querist)
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23 November 2011 There is a firm M/s. ABC. ABC uses the services of M/s. XYZ truck union (It is a union of Lorry drivers in that particular area. XYZ has PAN and Service tax Number) to transport its goods. The ABC makes payment directly to the drivers, the aggregate of which exceeds Rs. 35,000/- per day. The payment to single driver does not exceed 15,000/- per day. However, the bill is issued by the XYZ Truck union.

Now my question is:

a.Whether the provisions of Sec 40A(3) relating to cash payments in excess of specified limit are attracted?
b.Whether the Provisions of Sec 194 C relating to TDS are attracted?

CA SUMiT PATWARi

CA SUMiT PATWARi (Expert)
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24 November 2011 In my opinion both the provisions are attracted.
Rule 6DD may provide relief from Sec 40A(3) in special circumstances as provided therein.