ACCOUNTS AND FINANCE

CIRCULAR

Zonal Managers (All)
Managers (Sales) (All)
Dy. Managers (Sales/Acctts) (All).

Sub : Cash discount for advance payment - revised rates.
Ref : 1. S.S.Khetan Bhavan Cir.No.CTN/SS/Cash/ Discount/98-99/67 dt.5.4.99.
2. SS.Khetan Bhavan Cir.No.CTN/SS/Cash Discount/98-99/229 dated 22.4.99 and Circular dt.25.6.99.
3. SPC's decision dt. 20.11.99.
4. CTN/ACCTT/Cash Discount/99-2000/570 dt.4.12.99.

The Sales Promotion Committee has decided to revise the rates of cash discount from present rate of 15% to 9% p.a. applicable to the buyers who purchase the cotton bales for the season 2000-01 with effect from and inclusive of 24.11.2000 till further orders.

2. If at the time of finalisation at the deal the buyer demand this facility and effect full payment of the bales purchased by them and pass on the basis of 48 candies equal to 100 bales within 5 days from conclusion of the deal and starting of the schedule, then cash discount @ 9% p.a. will be given on actual number of days saved from the delivery schedule. If holiday falls on 5th day then payment will be accepted on next working day and accordingly number of days should be calculated : -

EXAMPLE : Suppose 2100 bales are purchased by the particular party of which delivery period will be 2 months equally for 365 days discount @ 9% p.a. means 0.02465% for one day.

If party makes payment on 5th day of total 2100 bales value. Then cash discount for first schedule of 1050 bales will available for 25 days. For 2nd schedule of 1050 bales on 55 days which works out to 1.3557% on 2100 bales. And if party makes payment within 5 days of each schedule then for the quantity of that schedule i.e.1050 bales cash discount shall be calculated @ 0.6162% on 25 days in that respective schedule.

EXAMPLE : - Suppose value of 200 bales comes to :-

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

4. 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.

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

6. If the cash discount is not demanded at the time of finalisation of the deal but the buyer wants to avail this facility for subsequent schedule then they will have to initially approach Khetan Bhavan Office and obtain a letter of acceptance of cash discount facility. On receipt of such request letter from the buyer S.O. Khetan Bhavan Office will take suitable decision depending upon the merit of the case and advise the buyer and all concerned accordingly. A copy of which needs to be endorsed Manager (P.A/c.) Gautam Bldg. Mumbai-15.Zone office will give appropriate cash discount.

7. All zones/S.O. must be in a position to have up to date accounting of contractwise 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 such contract.

Sd/-
(V.K. Kokate)
General Manager (A&F).