Interest collected by sugar factory in maharashtra

This query is : Resolved

Vinod Sawant-Bhosale (Querist)
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03 December 2011 Sugar Factory collect interest on working capital from purchaser in cash and give receipt there is no chance/time to deduct Tax from Interest & purchaser don't know of interest & its amount before payment. I want to know this expense allowable without TDS? is there any exemption to Sugar Factory to collect interest without TDS?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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04 December 2011 Sugar Factory collects interest it means , it is its income and not the expense.
TDS is required to be deducted by the payer.
Here payer is a farmer /sugarcane grower.
He is not required to deduct TDS.

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Vinod Sawant-Bhosale

Vinod Sawant-Bhosale (Querist)
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05 December 2011 when we purchase sugar from sugar factory sugar factory collect interest on working capital I am asking for that interest we paid to sugar factory as a purchaser i.e. our expense

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