Reimbursement of expense

This query is : Resolved

ashish saxena (Querist)
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06 December 2012 We have paid professional architect fee to an abroad company and have paid service tax also @ 12.36%. that party has raised 5000 $ fees out which 1000 is for service rendered to us and 4000 is for service renderd to other party for which we are constructing a commercial complex.

Now we need to claim reimbursement of 4000 $ from the other party as we have paid it on their behalf. What are the options available.

If we raise a debit note then is ST and TDS applicable because if we again charge ST on reimbursement it will be double taxed.

Or is there any other option to recover the same where double tax is avoided.

Amol S Joglekar

Amol S Joglekar (Expert)
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06 December 2012 In its true intent, you have given a loan of 4000$ + service tax on that to that other party. Why to mix the issue with service tax.

ashish saxena

ashish saxena (Querist)
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06 December 2012 Sir, Thanx for the reply but then how do we recover from other party 4000$ that we have paid on their behalf to foreign co. For that we have to raise a debit note or if there is any other option pls advise.

Amol S Joglekar

Amol S Joglekar (Expert)
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07 December 2012 Why do you need to raise anything. You have done a favour on that other person. Ask him/her to give you an appreciation letter along with the money. It will be required for your income tax case. Let the letter also mention that this arrangement was done to avoid the delay.... also include that the the funds are not carrying any interest.

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