Fringe Benifit Tax

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Anil Kumar (Querist)

06 July 2007 One unit of a PSU-a limited company has been awarded a contract from Government of Karnataka to train around 200 air hostess. The Money for training is provided by Govt. Of Karnataka.They have to provide these trainees boarding,lodging,training,air fare,conveyance and uniform etc. Part of the contract is sublet to a private party for providing boarding and lodging and part of training.Air fare conveyance,uniform is provided by this unit of the PSU.All The expenses are booked in the books of the unit as training expenses.This unit has made a profit of around Rs.15-20 lakhs on account of this.Will these expense attract FBT

Monark

Monark (Expert)

07 July 2007 FBT shall not apply as it is not an exp. on the employees of the Company.

Amit Thapar

Amit Thapar (Expert)

08 July 2007 Dear Anil and also Monark
Let me make it very clear to you that all these expenses mentioned by you are deemed fringe benefits under section 115W(c). It is nowhere written in the act that the expenditure must be on employees. Rather it is written that expenditure incurred on any person will attract FBT. Hence these expenses are liable to FBT.

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