18 May 2013
My Client incurred expenses on behalf of his customer for providing clearing and forwarding services, he is receiving the amount later by way of Reimbursment, whether this service provider liable to deduct TDS for such expenses or not?
18 May 2013
you have to deduct t.d.s. while paying on behalf of the client. because there is income element in it. but when client reimburses it to you, he is not liable to deduct t.d.s. as it is not income to you.
18 May 2013
It is also advisable that, for the reimbursement of expenditure and for service charges ,separate invoices should be issued, so that client would deduct TDS only on Service Charges. .
18 May 2013
If separate invoice is issued towards service charge of Clearing and forwarding agent and debit note towards reimbursement of expenses, then TDS should be there only from service charges and no tax is to be deducted from reimbursement of charges. You can also take benefit of judgement of (2012) 65 DTR 113 (Jd)(T) – ACIT vs. Minpro Indusries and also Om Satya Exim Pvt. Ltd. Vs. ITO ITA nO.335/Ahd/2010
18 May 2013
AS SAID ABOVE BY OUR EXPERTS, seperate invoice is required
and clearing agent should produce bills for all expences which he has claimed as re-imbursement expences which will enable us to take service tax credit on such bills
CAclubindia
