Applicablity of TDS on reimbursement of Transportation char

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This query is : Resolved

nageswararao (Querist)

23 April 2008 We purchased material from Mr X, as per purchase order commited that reimburse the transportation charges by production of LR/RR/Transport copy. The problem here is the reimbursement claimer is not a transporter, he diducted TDS from transporter as per IT norms, here the problem is shell we diduct TDS on payment made by me to supplier. URGENT

Regds

B.V.K.Nageswara Rao
Ph: 099891 57666
Email: nageswararao.bommakanti@ril.com

Sheetal Metha

Sheetal Metha (Expert)

23 April 2008 TDS is not applicable for the Reimbursement of expenses, out of pocket expenses.

R.V.RAO

R.V.RAO (Expert)

23 April 2008 Dear sri Nageswara Rao Garu,

The delhi bench of ITAT in ito vs.dr.willmarschewabe india (p) Ltd. held that reimbursement of expenses for which bills are raised separately,did not attract TDS.

Even CBDT held same view that if a separate bill is given for reimbursing out of pocket exp.,then reibursemenr of exp. is not subject to tds.

SO IN CASE YOUR SUPPLIER CLAIMED REIMBURSEMENT OF EXP. SEPARATELY IN A SEPARATE BILL, THEN YOU ARE NOT LIABLE TO DEDUCT TDS ON REIMBURSEMENT OF OUT OF POCKET EXP.
AS FAR AS YOUR ORIGINAL PURCHASE OF MATERIAL IS CONCERNED, IT DOES NOT ANY WAY ATTRACT TDS. SO I DO NOT SEE ANY NEED ON YOUR PART TO DEDUCT TDS.
THE OTHER PARTY WHO DEDUCTED TDS FROM THE TRANSPORTER IS UNDER STATUTORY OBLIGATION TO DEPOSIT THE TDS DEDUCTED BY HIM AND ALSO TO ISSUE TDS CERT. TO THE TRANSPORER BESIDES LIABILTY TO FILE QRTRLY. AND ANNUAL TDS RETURNS.
R.V.RAO