Please let me know in which head the food expenses would be charged in the books of accounts, if the employees have incurred the same while on travel representing the company and the company reimburses it.
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Charge of food expenses
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Quick Summary
Refreshment Expenditure under the head of other expenditure.
for travelling related to business, you may charge each cost pertaining to travelling in a separate ledger "Travelling expenses" with suitable narration for identification
or you may use other relevant ledgers for posting travelling expenses such as "business promotion" etc.
Booking and tax points:
• Ledger: "Travelling – Boarding/Food" (part of Travelling & Conveyance under indirect expenses). Not "refreshment", which is used for in-office tea or snacks.
• Income-tax: reimbursement of actual food costs during official tours is a business expense under Sec 37(1). It is not a perquisite for the employee if supported by bills, since the daily allowance exemption under Sec 10(14)(i) / Rule 2BB covers tour costs. A fixed per-diem without bills is exempt only to the extent spent, in the old regime only.
• GST: ITC on food and beverages is blocked under Sec 17(5)(b)(i), even with a GST invoice in the company's name. Book the full amount, including GST, as the expense.
• Internal control: a travel policy with per-day caps plus bills or a self-declaration supports deductibility in a tax audit.
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