Reimbursement exp.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2016 Sir, I want to know that if company give facility to Software Developer or any consultant of Travel or other expenses except consultancy fees then it would be liable in reimbursement exp. or what ? in which head of consultant or ?

M. A. Quadiri

M. A. Quadiri (Expert)
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06 July 2016 The expenses is incurred by the consultant and laterly reimburse by the service recepient is said to be reimbursement Provided it is agreed between service provider and services receiver before incuincurring the expenses. Otherwise it will form part of consultancy fees.

Querist : Anonymous

Querist : Anonymous (Querist)

07 July 2016 ok sir thanks for reply, as per your reply if Service Provider & Service Recepient are agreed then it is claimed as reimbursement expense in a/c that is clear.

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2016 ok sir thanks for reply, as per your reply if Service Provider & Service Receipient are agreed then it is claimed as reimbursement expense in a/c that is clear.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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20 July 2025 Exactly! To sum up your question about reimbursement expenses for things like travel or other costs provided to a software developer or consultant:

Key points:
If the consultant/service provider incurs expenses (like travel, accommodation, etc.) and is reimbursed by the company (service recipient),
And this reimbursement is agreed upon in advance (before incurring the expenses),
Then these reimbursements are treated separately from consultancy fees — just as reimbursement of expenses in the accounts.
How to treat in accounts:
Reimbursement expenses should be shown separately under a “Reimbursement” or “Expense Recovered” head (not as consultancy fees).
If no prior agreement exists, or expenses are not separately identified, then these expenses are considered part of the consultancy fees.
GST / Tax implication:
When reimbursement is separately stated and agreed, usually no GST applies on reimbursement (if genuine pass-through expenses).
If part of consultancy fees, GST is charged on the whole amount.

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