Our company has purchased new staff bus. Now we have to make payment to RTO (Regional Transport Office, Guajrat State) Rs. 60,000 as a statutory payment for obtaining necessary approval from them. Our admin dept is asking to pay by cash as they are making statement that if we will make payment in cash rather than DD / Cheque will expediate the process. Please note that RTO is a Gujarat Govt. Boday and if we make payment of Rs. 60,000 to RTO in cash will it disallow expenses? Please reply at the earliest. I will be very thankful to you.
05 April 2010
i think the amount you will pay to RTO will constitute the part of vehicle cost and is not revenue expenditure. The provision for payments in cash of more than 20000 is applicable on revenue expenditure only and on on capital expnditure. Please also note that the limit of 20000 is increased to 35000 in finance act 2009.
CAclubindia
