Cash sales below Rs200000
This query is : Resolved
01 September 2021
We have sold to a party Rs199500/ Goods in cash in aug2021. The same party again wants to purchase Goods from us in cash of Rs199000/ ? Can we sale them in cash? Can we accept cash against sales per month? Please advise?
01 September 2021
Yes, you can do so no problem.
03 September 2021
There is no limit prescribed for Cash Transactions under GST Law as of now, which means any registered person may enter into any business transaction attracting GST Law in cash of any amount including Sales/Purchases to/from unregistered persons.
However, Income Tax Law prescribes limits for Cash Transactions such as ₹10k Limit for cash business expenditure u/s 40A and ₹2L for any cash transaction u/s 269ST etc. Non-Compliance may attract dis-allowance of expenditure or even penalties.
Conclusion:
Since any GST taxable person is bound by provisions of both Income Tax Law as well as GST Law, he need to keep in mind the limit prescribed in Income Tax Law while doing business transactions.
As far as Sales Transactions are concerned the only applicable limit for seller is that he should not receive any cash amount of ₹2 Lakh or more for :
(a)any single sales transaction made to any person either in one or more days or
(b) multiple sales transaction in in single day to Same person aggregating to ₹2Lakh or more and receiving Cash thereof on same day.
(Limit of ₹10k is not relevant for seller, rather it will be relevant for purchaser to claim such purchase as business expenditure under Income Tax Law)
However, Income Tax Law prescribes limits for Cash Transactions such as ₹10k Limit for cash business expenditure u/s 40A and ₹2L for any cash transaction u/s 269ST etc. Non-Compliance may attract dis-allowance of expenditure or even penalties.
Conclusion:
Since any GST taxable person is bound by provisions of both Income Tax Law as well as GST Law, he need to keep in mind the limit prescribed in Income Tax Law while doing business transactions.
As far as Sales Transactions are concerned the only applicable limit for seller is that he should not receive any cash amount of ₹2 Lakh or more for :
(a)any single sales transaction made to any person either in one or more days or
(b) multiple sales transaction in in single day to Same person aggregating to ₹2Lakh or more and receiving Cash thereof on same day.
(Limit of ₹10k is not relevant for seller, rather it will be relevant for purchaser to claim such purchase as business expenditure under Income Tax Law)
03 September 2021
If We raise bill of Rs 10 lakhs in a single bill can we accept Rs 199999 daily in five consecutive days. Pl clarify?
03 September 2021
No, such transactions would violate provisions of section 269ST.
Instead, if several invoices on different dates (<2 lacs) are raised then separate receipts on different dates (<2 lacs) are acceptable under income tax.
Instead, if several invoices on different dates (<2 lacs) are raised then separate receipts on different dates (<2 lacs) are acceptable under income tax.
03 September 2021
Y mean to say bill raised for Rs199999/ in five different dates then we can accept cash less then 2 lakhs in those different dates. Pl confirm
03 September 2021
Y mean to say bill raised for Rs199999/ in five different dates then we can accept cash less then 2 lakhs in those different dates. Pl confirm
03 September 2021
Yes, you are right
03 September 2021
Do we need to take pan no or pan card from the purchasing party. Is it mandatory to take pan card? Pl clarify regarding pan card?
03 September 2021
Do we need to take pan no or pan card from the purchasing party. Is it mandatory to take pan card? Pl clarify regarding pan card?
03 September 2021
No need of PAN party has to confirm the transaction when enquired by IT authority and it should reflect in his books of accounts. Cash transactions exceeding 10,000 will be disallowed in case of business man. Have his address and phone number.
03 September 2021
Do we need to take pan no or pan card from the purchasing party. Is it mandatory to take pan card? Pl clarify regarding pan card? What does Income Tax laws say in this regard?
03 September 2021
As already replied above, no pan card or pan is required if the transaction is within the threshold limit.
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