Buying river sand - accounting procedures ?

Merina (Student) (310 Points)

10 April 2013  

Hi I am doing the audit of a construction company. They are buying river sand from different people ( It is coming under 'unregistered purchase' ). Almost all of them were cash payments and some exceeded 20,000 also. The yearly payments to all of them run to Lakhs of rupees.

The suppliers wont supply us any bill (Local people) and not having PAN.

Should we deduct TDS for payments to such people or such purchases attracts any other tax ? If any other treatments is there kindly let me know.

Kindly reply