Payment under c&f agreement
P.C. Joshi
(Querist) 09 March 2012
This query is : Resolved
Dear Sirs,
Members views are solicited on the following issue.
A Pvt. Ltd. enetered into a C&F agreement with a proprietory concern B for a period of one year against payment of commission at fixed rate, reimbursement of monthly fixed expenses and loading unlosding charges at per kg basis. While thev agreement is on, the c &f agents wants A Pvt. Ltd. to make payment in three diffrent names viz pary amount in the name of proprietor concern i.e. B , part payment in the personal name of proprietor and some part payment in the name of his wife.
Can such an arrangement be legally made by inserting an amendatory agreement wherein the agreement is in name of proprietor concern and payment to in different names..
Thanks
P.c. Joshi
Deepak Nair
(Expert) 09 March 2012
Such an amendment to the agreement can be done and there is nothing illegal in that.
If both the parties agree to this condition, then there is no harm in doing so.
P.C. Joshi
(Querist) 09 March 2012
But sir, if you are making agreement in the name of a proprietor can you make payment in different name. How we will set off the payment shown in their name when the agreement is not in their name.
Regards
P.c. Joshi
Deepak Nair
(Expert) 09 March 2012
I repeat here that there is no harm in doing so if both the parties expressly agree to the same.
In the event of auditing of accouts etc, the same can be justified by that clause in the agreement.
P.C. Joshi
(Querist) 09 March 2012
Can service tax department raise any demand afterwards saying that it has been done with intension of diversion of services to avoid service tax.
regards
P.c. joshi
r sugumaran
(Expert) 11 March 2012
I agree with Mr.P.C.joshi. You may have to face service tax issues.
