Exemption under Section 194N - Notification No 70/2019

[Krishna Murthy]

Sir, this is with regard to exemption given under NN 70/2019 dated 20-09-2019 with respect to TDS of cash withdrawls from bank. Exemption in the above notification is given to traders operating under APMCs.

In this matter, there are two types of transactions done by traders.

1. Trading with farmers in the APMCs itself. Here, the farmers and traders come under the premises of APMCs and make transactions with each other. This would be under the control of APMCs and cess @ 1% would be collected by APMCs.

2. Trading with farmers would be done outside APMCs. However, APMCs would be paid Cess of 1% for the transactions made outside the APMCs.

Would both the above transactions come under the preview of exemption or only first type of transactions would come under the exemption? Pls clarify.

AI Summary

Exemption under Section 194N questioned whether APMC-registered traders' off-premises cash withdrawals qualify for relief. Notification No. 70/2019 provides an exemption from withholding on cash withdrawals for traders operating under APMCs. The core issue is whether that exemption covers (a) transactions conducted within APMC premises where the APMC collects cess, and (b) transactions conducted outside APMC premises for which cess is nevertheless paid to the APMC, thereby testing the exemption's scope in relation to location of trade and cess payment.