Buying river sand - accounting procedures ?

Hi I am doing the audit of a construction company. They are buying river sand from different people ( It is coming under 'unregistered purchase' ). Almost all of them were cash payments and some exceeded 20,000 also. The yearly payments to all of them run to Lakhs of rupees.

The suppliers wont supply us any bill (Local people) and not having PAN.

Should we deduct TDS for payments to such people or such purchases attracts any other tax ? If any other treatments is there kindly let me know.

Kindly reply

Replies (1)

As the comapny is purchasing the material so tds liabilty is not arised on the same as purchase of sand also not covered u/s 194c.

And cash payments beyond 20000/- in a single day is disallowed of payments made to the same person.

as your company is buying send from unregistered dealer then normal bills can be treated as invoice fro ur purchases.

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