1. We are authorised agent of the state govt. company.
2. Our name is appearing on the invoice as an agent.
3. Goods are dispatched by govt. co.(G) directly to Buyer(B). Invoice is raised by G. directly on B. even excise gate pass also made directly in the name of B.
4. We are taking responsibility of payment and hence major payments are made through us.
5. Govt. gives us commission at prescribe % by way of quantity rebate and same is shown as are Income in the Profit & Loss A/c.
6. We also charges are Buyer our service charges for procurement and finance of material purchased by them. We raised Debit Note on them and in turn they pay the same, it is also known as our income.
7. We don’t include any sales/purchase as our Turnover since at no times we are owner of goods.
8. Commission paid to us is in the nature of Delcrader (guarantying payments).
There is no formal written agreement between us and Govt. co.
In our Balance sheet outstanding receivable from Buyers are more than our turnover in Profit & loss A/c (Commission) as it includes material cost which we have paid to Govt. co. and to be recorded from Buyer.
I.T.O. went to treat full turnover including material cost on our turnover and the same amount goes beyond 40 lakhs wants to charges 271B penalty for not filling 44ab audit report.
CAclubindia
