Tds on reimbursement of expenses
This query is : Resolved
05 June 2015
One of my clients ( say A) is a subsidiary of a Singapore based Co. (Say B). B Co. has various subsidiaries all over the world. B Co. has entered into an agreement with a 3rd Party "C" for Annual Maintenance of Scanners For all its subsidiaries globally. A specific rate is fixed for each type of scanner. Now C raises an invoice to B for maintenance of scanners at the offices of A in India. The maintenance work is carried out by C or its agents/franchisee in India at A's offices. Only in case of any major repairs, the scanners are sent to Singapore or Dubai. Now B raises a debit note to A for scanner maintenance on cost to cost basis. When A is making payment to B, can it claim exemption from withholding of taxes under reimbursement of expenses?
05 June 2015
For A company, it is NOT at all reimbursement of expenses. The withholding tax is very much applicable. So much so, in this kind of transaction, it is also exigible to service tax.
05 June 2015
Yes it can claim exemption from withholding tax under reimbursement of expenses.
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