CIRCULAR

To
Zonal Manager (All)
The Zonal Accounts Officer, (All)
The Dy.Manager (Sales) All.

SUB.:- Cash Discount for Advance payment.
Ref.:- 1) S.S.Khetan Circular No.CTN/SS/CASH DISCOUNT/98-99/67 dated 5-4-99
           2) S.S.Khetan Bhavan Circular No.CTN/SS/CASH DISCOUNT/98-99/229
           3) SPC's DECISION Dt.20-11-99.

Please refer above circular, it has been noticed that the Buyers, particularly those who have purchased bulk quantity on longer delivery period are not lifiting the bales int he prescribed delviery schedule.  Considering the above situation and facts the buyer in to lift the bales.  Federation has decided to give the cash discount @15% p.a.w.e.f.20-11-99 for the 1998-99 and 1999-2000 season.

If at the time of finalisatoin at the deal the buyer demand this facility and effect full payment of the bales purchased by them and pass on the basis 49 candies equal to 100 bales within 5 days from conclusion of the dea and starting of the schedule, the cash discount @15% p.a.will be given on actual number of days saved from the delivery schedule.   If haliday falls on 5th day then payment will be accept on next working day and accordingly number of days should be calculated:-

EXAMPLE: Suppose 5100 bales are purchased by the particular party of which delivery period will be 3 months equally for 365 days discount @15% p.a. means 0.04109% for one day.

If party makes payment on 5th of Day of total 5100 bales value.  Then cash discount for first schedule of 1700 bales will be available for 25 days.  For 2nd Schedule of 1700 bales on 55 days and 3rd schedule of 1700 bales on 85 days which works out to 2.2602% on 5100 bales.  And if party makes payment whitin 5 days of each schedule then for the queantity of that schedule i.e., 1700 bales cash discount shall be calculated 1.0273% on 25 days in that respective schedule.
EXAMPLE:- Suppose value of 200 bales comes to :-

1. Cotton Value                                             Rs.15,00,000/-
2. S.Taxes 4%                                               Rs.     60,000/-
                                                                      ----------------
                                                                     Rs.15,60,000/-
Less cash discount on cotton
values of Rs.1500000/- 15% for 3 months   Rs.56,250/-
                                                                   ----------------
Invoice No.                                                   Rs.15,03,750/-
                                                                    ===========

Cash discount will be allowed only on Cotton value which please be noted.

The Invoices should be prepared as per contract rates and after charging sales tax.   The cash discount on value of material may be allowed and shown in Invoice.   Sales Tax amount or B.C.Forms or 'C' Forms should be accepted only on the value of contracted rates and not on discounted rate.

Cash discount will not be entertained on any part quantity unless there are specific instruction from Higher Authority.  Discount will be calculate on minimum payment at complete quantity in a particular schedule.

If the cash discount is not demanded at the time of finalisation of the deal but the buyer wants to avail this facitlity for subsequent schedule then they will have to approach Khetan Bhavan Office First and obtain a letter of acceptance of cash discount facility.  On receipt of such request letter from the buyer then Khetan Bhavan Office will take suitable decision depending up on the merit of the cash and advice the buyer and the concerned zone accrodingly.  A copy of which needs to be endorsed Manager (P.A/c.) Gautam Bldg. Mumbai - 15 and zone office will give appropriate cash discount.

All zones /S.O. must be in position to have up to date accounting of contract wise information about grant of cash discount to parties which should be reported to this office and sales Dept. Khetan Bhavan after completion of deliveries of of such contract.

GENERAL MANAGER. (P.A/c.)