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Question ID : 44602

118411

"A" is suppliers to "B" and A is registered under the MSMED Act, 2006. As per written agreement between A and B, B is required to retain certain amount from bills of A and that retention is 12% of the bills amount without considering any indirect taxes. A has furnished B a Udhyam Registration Certificate. Now B will pay 88% of the bills to A and 12% retain and that retention shall be payable after 24 months from the date of receipt of goods. Shall section 43B(h) apply to such retention upto 12% of the bill amount?

Posted by KETAN SHETH on Jan 27, 2024

Filed Under DIRECT TAXES

Answer ID : 85280

If there is written agreement executed for such retention money, provisions of section 43B(h) will not be applicable to such retention money, as "amount payable" will be the amount other than the retention money.

Posted by CA. chunauti dholakia on Jan 27, 2024