23 September 2008
Payer is a Bank (Say, A Ltd). It is financing the Vehicles for variuos Dealers (Say, B lTd).The Dealer (B ltd) regularly gives free insurance to the customers who purchased vehicle from them through financing by A lTd. Dealer (B Ltd) raises invoice on Bank (A Ltd)for reimbursement of Insurance charges given to customers. Whether Bank (Altd) needs to pay FBT on this kind of payment under "sales promotion" head? And also whether TDS needs to be deducted on such payment? If yes then under which section? Please advise.
23 September 2008
Its free for the customer because he need not pay for it but but dealer has paid to RTO for the same and now claimimg reimbursement from the bank as per agreement.
23 September 2008
LIABLE FOR FBT:1) Expenses on free offers, artwork or payment of royalty charges in respect of free offer products. 2) Expense incurred for hotel stay, air ticket charges in relation to customers/clients. 3) Expenditure on gifts under trade schemes or for promotion of co's products to Distributors / Retailers. 4) Employer carrying out the product research through its own employees, the expenditure considered deemed fringe benefits under any other clause. NOT LIABLE FOR FBT:1) Advertisement in any print, journals, catalogues or price list or electronic media or transport system, including rental on advertisement. 2) Business meetings: Holding or participating in press conference or business convention or fair or exhibition. 3) Sponsorship of any sport or any other event organised by any Government Agency, Trade Association or Body. 4) Statutory Advertisement : Publication in any print or electronic media of any notice required to be published by or under any law or by an order of a court or a Tribunal. 5) Other Advertisement: Advertisement by way of Signs, Artwork, Painting, Banners, Awnings, Direct Mails, Electric Spectaculars, Kiosks, Hoardings, Bill Boards, display of products or by way of such other medium of advertisement. 6) Payment to advertising agency for any of the above purpsoe. 7) Sales promotion expenses like brokerage and commission / performance based commission. 8) Expenditure relating to salesmen appointed by distributors for co's products reimbursed through credit notes.
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