FBT QUARIES

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DIBYENDU (Querist)
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10 August 2008 Dear Sir,

Please help me

If a construction company uses a hire car from jurney of his employee from one working site to another ....is it fail under conveyance u/s 115WB(2)(F) and attarack FBT?

If the company paid installments , includs Principal & Interest of his own car .....is the company liable to pay FBT on Interest charged on Car loan....i) if he booked total cost includs interest as Fixed Assets or 2)Interest debited in P& L A/C?

DIBYENDU

DIBYENDU (Querist)
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10 August 2008 PLEASE HELP ME

CA Abhishek Tyagi

CA Abhishek Tyagi (Expert)
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10 August 2008 In the first case it will be taxable under fbt provisions. your second query is not clear to me. Pls ask in detail.

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)
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10 August 2008 First query answered by Abhishek correctly.
For second query, the answer is yes. In my opinion, The company is liable to pay FBT on interest paid on loan for car, whether it is shown in P&L Account or capitalised in Fixed Assets.

DIBYENDU

DIBYENDU (Querist)
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14 August 2008 Thanks to Mr.A.Tyagi & Mr. T.Maheshwari.

My new quary is if a company pay some amount for purchase of fire wood,which is exclusivly use as fuel for cooking of labours at site....is this expenses attact FBT under staff welfare u/s 115WB(2)(F)?

My another quary is if a company pay tips by the way of cash (driver , bearer etc)to any person (other staff) is it fail u/s 115WB (2) (O) & attact FBT.

Please answer my quary

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)
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15 August 2008 Practically, there is no as such any case laws or provisions on your problems, but in my opinion, both should be taxable under FBT provisions. In first case, it shall be treated as Staff Welfare hence taxable in FBT. In second case, the amount of tip shall be added to the respective expenses, like if you are paying tip to a waiter during a party for Business promotion, the tip amount is also added into BP Amount. Hence it shall be taxable if the expenses is covered in FBT.

DIBYENDU

DIBYENDU (Querist)
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03 September 2008 Thanks Mr. T.Maheshwari for your valued reply.

My next question is:-

If a company maintain a mass at site, for dinner , lunch of his labour & staffs etc. and engage cook for cooking work in this mass. is amount pay to cook for his cooking work at mass , come under staff welfare and came under scope of FBT u/s 115WB(2)(E)? OR it is neglect from FBT for the cause cost of 'employees food & beverage expenses' under hospitality u/s 115WB(2)(B)? also please answer cost of meal charges pay to company for there staff , labours in mass set up by company in or out of working hours attack FBT?