Cash receipt by ‘Co-op. Society’ from dealer across multiple days not to be aggregated for Sec. 269ST purpose: CBDT
Reference was received by the CBDT as to whether receipt of cash by Co-operative Societies from a distributor for the sale of milk on a bank holiday or a day when the bank is closed should be considered a single transaction or aggregated with all such cash receipts from the distributor in the previous year to be treated as a single event or occasion under Section 269ST. It was clarified that such receipts should not be aggregated across multiple days for the purposes of Section 269ST.
Circular No. 25/2022-Income Tax
F. No. 225/129/2022/I TA- II
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Direct Taxes)
*****
New Delhi, Dated 30th December, 2022
Subject: Clarification for the purposes of clause (c) of Section 269ST of the Income-tax Act, 1961 in respect of dealership/distributorship contract in case of Co-operative Societies – reg.
Section 269ST inter-alia prohibits receipt of an amount of two latch 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.
2. 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.
3. 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 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.
(Ravinder Main!)
Director to the Government India
Copy to:
1. PS to FM/ OSD to FM/ OSD to MoS(R).
2. PS to Secretary (Revenue).
3. The Chairperson, Members and all other officers in CBDT of the rank of Under Secretary and above.
4. All Pr. Chief Commissioners/ Pr. Director General of Income-tax – with a request to circulate amongst all officers in their regions/ charges.
5. CIT (M&TP), CBDT.
6. Web manager for posting on the Departmental website.
7. Database Cell for posting on the irsofficersomme website.
8. Guard File.
9. Director to the Government India
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