internet charges paid-whether fbt payable

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This query is : Resolved

satish tukaram lad (Querist)

12 October 2007 private ltd company (hotel industry) paid internet bill for their use whether they are liable to pay fbt and whether one time charges for internet charged in 1st bill also chargable for fbt

S.RAVICHANDRAN

S.RAVICHANDRAN (Expert)

13 October 2007 Fringe Benefit tax list covers telephone bills which includes internet also. Only leased line telephones are exempted from the FBT net.

Therefore your hotel company is liable to pay FBT. As for the one time payment is concerned check whether it is repayable deposit. If so you need not pay FBT for Deposit which is Balance Sheet item.

Ravikumar.G

Ravikumar.G (Expert)

13 October 2007 Except Leased Lines all other Telephone and Internet Expenses will come under FBT Net.

Whether expenditure for use of telephone includes (i) expenditure for use of telephone installed in the office and (ii) payment of telephone (including mobile phone) bills in the name of the company directly made by the company?

In terms of the provisions of clause (J) of sub-section (2) of section 115WB, expenditure incurred or payment made for the purposes of use of telephone (including mobile phone) other than expenditure on leased telephone lines is liable to FBT. Therefore, expenditure on use of telephones (including mobile phones) installed in the office is liable to FBT. This is so, irrespective of whether the telephone is in the name of the company or not and also whether payment for its use is made directly or indirectly by the company.

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