FBT ON EXPENSES INCURRED ON CUSTOMERS
This query is : Resolved
30 May 2008
Dear Sir,
Our Company is a Trading Company I.E we get Commission on Sale of Machineries by the Korean Company to Indian Company and our Company act as an agent for Marketing of Korean Company for the sale of there machineries to Indian Company
Exhibition are held in India Machineries are kept in the Exhibition for sale.
My query is that Our Company First Pays the Expenses Incurred on our Korean Counterparts such as Travelling TKTS and Boarding and Lodging Later on we raise a Debit note on our Korean Counterpart and we get the reimbursement for the same
Is FBT is applicable on this reimbursement since there is no employer and employee relationship
Please suggest
Regards
Ravi Konda
Our Company is a Trading Company I.E we get Commission on Sale of Machineries by the Korean Company to Indian Company and our Company act as an agent for Marketing of Korean Company for the sale of there machineries to Indian Company
Exhibition are held in India Machineries are kept in the Exhibition for sale.
My query is that Our Company First Pays the Expenses Incurred on our Korean Counterparts such as Travelling TKTS and Boarding and Lodging Later on we raise a Debit note on our Korean Counterpart and we get the reimbursement for the same
Is FBT is applicable on this reimbursement since there is no employer and employee relationship
Please suggest
Regards
Ravi Konda
30 May 2008
The Same Query is raised before Department and in their reply they have said that if the expenditure is incurred by an employer and it is later on reimbursed by client, the employer will be subject to fringe benefit tax (Not the Client) - Circular No.8/2005 dated August 29,2005(Question No.12/13).
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