Circular No. 18/2021
CBDT has issued clarification pertaining to section 36 (1) (xvii) of the Income Tax Act in pursuance of instances of additional payments being made as income distribution to farmers.
The aforementioned clause reads as-
“(xvii) the amount of expenditure incurred by a co-operative society engaged in the business of manufacture of sugar for purchase of sugarcane at a price which is equal to or less than the price fixed or approved by the Government”
The Clarification issued pertains to the phrase highlighted.
It has been clarified that the price fixed/ approved by the Government includes price fixed by State Governments through State-level Acts/Orders or other legal instruments aimed towards regulating the purchase price of sugarcane, which may be higher than the Statutory minimum price fixed by the Central Government.
