Will tds attact on reimbursment of expenses

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This query is : Resolved

Sivaramakrishna (Querist)

18 May 2013 My Client incurred expenses on behalf of his customer for providing clearing and forwarding services, he is receiving the amount later by way of Reimbursment, whether this service provider liable to deduct TDS for such expenses or not?

Thanks in Advance
Srk

TKKKKKK

TKKKKKK (Expert)

18 May 2013 you have to deduct t.d.s. while paying on behalf of the client. because there is income element in it. but when client reimburses it to you, he is not liable to deduct t.d.s. as it is not income to you.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

18 May 2013 It is also advisable that, for the reimbursement of expenditure and for service charges ,separate invoices should be issued, so that client would deduct TDS only on Service Charges.
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Vishal

Vishal (Expert)

18 May 2013 If separate invoice is issued towards service charge of Clearing and forwarding agent and debit note towards reimbursement of expenses, then TDS should be there only from service charges and no tax is to be deducted from reimbursement of charges. You can also take benefit of judgement of (2012) 65 DTR 113 (Jd)(T) – ACIT vs. Minpro Indusries and also Om Satya Exim Pvt. Ltd. Vs. ITO ITA nO.335/Ahd/2010

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Rajesh Dubey

Rajesh Dubey (Expert)

18 May 2013 Agreed with Mr. Vishal

Ganeshbabu K

Ganeshbabu K (Expert)

18 May 2013 AS SAID ABOVE BY OUR EXPERTS,
seperate invoice is required

and clearing agent should produce bills for all expences which he has claimed as re-imbursement expences which will enable us to take service tax credit on such bills

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