Applicability of tds on export freight reimbursement

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 May 2018 Dear All,
Good day
Here i want one clarification regarding the applicability of TDS
Facts of the Case:
We are X Ltd entered in to the agreement with foreign customer Y Ltd to supply the material on FOB Basis through Sea.way from chennai port.

Due to our supply related issues...to save time.... our Customer choose export through Air on FOB Basis, and asked us to reimburse the differential freight (air freight over the sea freight).

Here my doubt is whether this reimbursement will attract any Tax as per Income Tax Act.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 May 2018 It will not attract any tax as profit element is not there on reimbursements.

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