A customer purchases the raw material(Quartz) from the supplier who has not paid royalty for lifting the Quartz from the mines. whether the liability of payment of royalty will fall on Customer since the supplier has not paid to state government. Please clarify my doubt.
2 Replies
Manoj Mehta
(Head Of Department (Accounts & Finance))
(1479 Points)
Replied 07 March 2014
Dear rajender
i think royaliy payment liability will not fall on the customer. Supplier will be liable for the same. But if you have made any contract regarding the same then it can be transfer to customer. I suggest you to put querry in expert on this site to get more clearity on the same.
KRISHNAPRASAD IYER
(B.Com , CA Final)
(657 Points)
Replied 07 March 2014
The liability will depend on the terms of agreement between the customer and the supplier.
However, the mineral (quartz) can only be taken out of the mine after the royalty has been paid.
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