Tds on reimbursement of expenses
This query is : Resolved
Ankit Jain
(Querist)
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?
Amol S Joglekar
(Expert)
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.
CA R SEETHARAMAN
(Expert)
05 June 2015
Yes it can claim exemption from withholding tax under reimbursement of expenses.
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