A trading concern purchases menthol from farmers and sells it further to other business concerns.
My question is how much cash purchase can the firm do with the farmers?
Is there any limit ?
CA Ankur Agarwal (CA) (110 Points)
09 June 2017A trading concern purchases menthol from farmers and sells it further to other business concerns.
My question is how much cash purchase can the firm do with the farmers?
Is there any limit ?
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(167415 Points)
Replied 10 June 2017
As per exemption provided vide clause 5 of Rule 6DD, you can pay cash amount to farmers for cash purchase without attracting section 40A(3).
But farmers are not spared from section 269ST applicable from April, 2017; whereby any cash purchase upto 1.99 lakhs per day per transaction can be made without any litigation.
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