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An enterprise influences the prices and other terms for supplying raw materials and consumables to a manufacturer. What minimum share of the manufacturer’s requirements must the enterprise or its…

Question and options

An enterprise influences the prices and other terms for supplying raw materials and consumables to a manufacturer. What minimum share of the manufacturer’s requirements must the enterprise or its specified persons supply to satisfy section 162(1)(g)?

  1. 80%

  2. 100%

  3. 50%

  4. 90%

Answer and explanation

Correct answer: D - 90%

Section 162(1)(g) of the Income-tax Act, 2025 treats the manufacturer as an associated enterprise where 90% or more of its raw materials and consumables are supplied by the other enterprise or persons it specifies, and that enterprise influences the prices and other conditions of supply. Total dependence is required only under section 162(1)(f), for know-how, patents and similar rights.

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