Stamp Vendor Turnover

[KUMAR Narasimhan]

Dear Sir / Madam,

A stamp Vendor who has taken stamp paper licensed from Govt and selling the Stamp Paper to his customers.

Question no 1:

He Sells close to 6 Crore worth of stamp paper in a Financial year and generated a profit of ₹ 6 Lakh from it, meaning 1% is profit.

In this case should he needs to do a Tax Audit for the respective Financial year?

Question no 2:

He deposited the worth of 5.3 crore cash deposit ( Collected the cash from Customer) to purchase the stamp paper.

Shall we show this transaction as purchase and sales, meaning as a Trade or we can show this as Commission amount alone to prepare the Financial.

Please clarify

AI Summary

Stamp Vendor Questions Tax Audit Need for 6 Crore Turnover; Advised to Report High Cash Deposit as Trade Transaction. A stamp vendor, licensed by the government, sells stamp paper worth approximately 6 crore INR annually, earning a profit of 6 lakh INR (1% profit margin). The vendor inquires whether a tax audit is necessary given this turnover. Additionally, the vendor deposited 5.3 crore INR in cash, collected from customers, to purchase stamp paper and seeks advice on whether to report this as a trade transaction or solely as commission income. The response suggests that reporting the transaction as a trade is safer due to the high cash deposit amount.