Scribd
Upload
36 views

Circular No 18 2021

This document provides clarification regarding section 36(1)(xvii) of the Income Tax Act of 1961 relating to deductions for cooperative sugar mills. It clarifies that the phrase "price fixed or approved by the Government" includes prices set by state governments through state laws and orders, including state advised prices that may be higher than the central government's statutory minimum or fair price. This is in response to issues around additional payments for sugarcane prices being treated as income distributions to farmer members with tax liabilities. The clarification applies retroactively from the 2016-2017 assessment year onward.

Uploaded by

vijay
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
36 views

Circular No 18 2021

This document provides clarification regarding section 36(1)(xvii) of the Income Tax Act of 1961 relating to deductions for cooperative sugar mills. It clarifies that the phrase "price fixed or approved by the Government" includes prices set by state governments through state laws and orders, including state advised prices that may be higher than the central government's statutory minimum or fair price. This is in response to issues around additional payments for sugarcane prices being treated as income distributions to farmer members with tax liabilities. The clarification applies retroactively from the 2016-2017 assessment year onward.

Uploaded by

vijay
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

Ci rcular No. I'!?

/2021

F.NO .173/146/2021/ITA-I
Governm ent of India
Mi nistry of Finance
Department of Reven ue
Central Board of Di rect Taxes

...
New Delhi , Dated Z>October, 2021

Subject : Cla ri ficati on regarding Section 36(1)(xvi i) of the Income-tax Act. 1961 inserted
vi de Finance Act. 2015 - reg.

The Finance Act, 2015 inserted the following clause (xvii) in sub-section (1) of section
36 of the Income-tax Act, 1961 (the Act) to provide for deduction on account of the amount of
expenditure incurred by a co-operative society engaged in the business of manufacture of
sugar -
"(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 fIXe d o r approved by the Govemm ent;"
This clause took effect from 01 .04 .2016 and according ly applied to assessment year
2016-17 and subsequent assessment years.

2. The issue of treatment of additional payment for sugarcane price by Cooperative sugar
mills as an income distribution to farmer members and the resultant tax liabilities has been
brought to the notice of the Central Board of Direct Taxes (the Board) .

3. The matter has been examined by the Board and in this regard , it is clarified that the
phrase 'price fixed or approved by the Government' in clause (xvii) in sub-section (1) of section
36 of the Act includes price fixation by State Governments through State-level Acts/Orders or
other legal instruments that regulate the purchase price for sugarcane. including State Advised
Price, which may be higher tha n the Statutory Minimum Pricel Fai r and Remunerative Price
fixed by the Central Government.

~
(Soura bh Jain)
~ "'-
.~ HV"I
Under Secretary to t he Govern ment of Ind ia

Copy 10 :

1. PS to F.M.I PS to MoS (F).


2. PS to Revenue Secretary .
3. Chairman (CBDT)& All Members of CBDT.
4. All ProCCsIT/CCsIT/Pr. DGsITIDGs lT.
5. All Joint Secretaries/CsIT, CBDT.

Page 1 01 2
6. DirectorslDeputy Secretaries/Under Secretaries of CBDT.
7. Web Manager, w ith a request to place the order on official Income-tax website .
8. CIT (M&TP), Official Spokesperson of CBDT with a request to publicize w idely.
9. JCIT, Data Base Cell for placing it on irsofficerson line.gov .i n.
10. The Institute of Chartered Accountants of India, IP Estate, New Delhi .
11 . All Chambers of Commerce.
12 . The Guard File .

vV\
(Sourabh Jain)
Under Secretary to the Government of India
- '-
-;"H VVI

Page 2 of 2

You might also like