clarification on trading of Stamp
This query is : Resolved
Naval Agrawal
(Querist)
11 September 2008
Dear Sir,
My client is a Stamp Vendor in Madhya Pradesh and when he purchase a stamp he paid amount after deduction 1.5% on total stamp velue. I want to know that this 1.5% amount is a commission or discount. I also want to solve some following points :
1.Whether it is commission then tax audit applicable above on Rs. 10.00 lacs commission ?
2. Whether it is discount then tax audit applicable on Sales of stamp above Rs. 40.00 Lacs.?
3. If it is assume as discount then can he allow discount to customers.?
4. If it is assume commission then can he allow discount to customers?.
My client is a Stamp Vendor in Madhya Pradesh and when he purchase a stamp he paid amount after deduction 1.5% on total stamp velue. I want to know that this 1.5% amount is a commission or discount. I also want to solve some following points :
1.Whether it is commission then tax audit applicable above on Rs. 10.00 lacs commission ?
2. Whether it is discount then tax audit applicable on Sales of stamp above Rs. 40.00 Lacs.?
3. If it is assume as discount then can he allow discount to customers.?
4. If it is assume commission then can he allow discount to customers?.
11 September 2008
It is the Commission Income in the hands of the Stamp Vendor. Tax Audit will have to be done in case the receipt is 40 lacs or more.
He can allow discount if the terms and conditions of his appointment as a Stamp Vendor do not contain any clause to the contrary. However, the payment may have to be substantiated before the AO and such a system is prevalent in the normal course of the business.
He can allow discount if the terms and conditions of his appointment as a Stamp Vendor do not contain any clause to the contrary. However, the payment may have to be substantiated before the AO and such a system is prevalent in the normal course of the business.
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