The CBDT vide Circular No. 25/2022 dated December 30, 2022 has issued clarification for the purposes of clause (c) of Section 269ST of the Income-tax Act, 1961 (“the IT Act”) in respect of dealership/distributorship contract in case of Co-operative Societies.
Section 269ST inter-alia prohibits the receipt of an amount of two lakh rupees or more (hereinafter referred to as ‘the prescribed limit’) by a person, in the circumstances specified therein, through modes other than by way of an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed.
References have been received in respect of Milk Producers’ Cooperative as to whether under the provisions of Section 269ST of the Act, receipt(s) in cash in a day of bank holiday/closure of bank day within ‘the prescribed limit’ from a distributor against sale of milk when payments were through bank on all other days is to be considered as a single transaction or whether all such receipts in cash in a previous year would be aggregated in respect of transactions with a distributor to treat it as one event or occasion.
With respect to the reference at Para 2 above, it is clarified that in respect of Co-operative Societies, a dealership/ distributorship contract by itself may not constitute an event or occasion for the purposes of clause (c) of Section 269ST. Receipt related to such a dealership/distributorship contract by the Co-operative Society on any day in a previous year, which is within ‘the prescribed limit’ and complies with clause (a) as well as clause (b) of Section 269ST, may not be aggregated across multiple days for purposes of clause (c) of Section 269ST for that previous year.
The Circular can be accessed at: https://incometaxindia.gov.in/communications/circular/circular-25-2022.pdf
DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose and for the reader’s personal non-commercial use. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon. Further, no portion of our article or newsletter should be used for any purpose(s) unless authorized in writing and we reserve a legal right for any infringement on usage of our article or newsletter without prior permission.
__________________________________________________________________________________________
 |
|
🔰 Special New Year offer on: 📍Online Recorded GST Course on “Scrutiny Notices, Assessment, Audit, Inspection, Search, Seizure and Arrest under GST” (November, 2022)
🔖For Registration: https://www.a2ztaxcorp.in/product/gst-course-new/ Note: Special new Year offer valid till January 06, 2023 Key features of course:
Terms and Conditions:
For details, or any queries, Call us at: 8076563802, 011 42427056 or E-Mail us at: info@a2ztaxcorp.com, intern@a2ztaxcorp.com or Visit: www.a2ztaxcorp.in |