FBT on Reimbursement to Consultants

Facts of the case:

Company is paying reimbursement in respect of expenditure incurred, like Petrol Expenses, Travelling expenses, and Lodging and boarding expenses, in India, as well as for Foreign travel (petrol reimbursement ONLY IN INDIA). Th persons who are in receipt of the said reimbursements, are in the nature of Full-Time Consultants to the Company.

Query:

Since an employer-employee relationship does not exist in this case, can any other provisons of FBT be made applicable to the same?

 

PLEASE REPLY FAST, ITS VERY URGENT.

THANKS IN ADVANCE!!

Replies (10)

plz explain all the exp.have been booked under which head first

i.e travelling exp.or all exp.in one head i,e professional exp.?

If the expenses are reimburesed by debiting the respective account heads such as travelling A/c then the company is liable. But if the company has reimburesed by debitin any other heads such as reimbursement A/c or Professional fee A/c then the company is not liable to pay.

No FBT shall be levible to the company coz such reimbursement is ssentially a component of professional fee paid to the consultant. However the company needs to disclose under consultancy charges. 

Very interestingly the law requires the consultants to pay FBT on it. However we all know that not to many auditors or lawyers pay this.  

The Account head they debit is "Reimbursement of Travelling expenses to Consultants".

The problem here is that they show "REIMBURSEMENT", as well as "TRAVELLING TO CONSULTANTS".

Thanks to all of u madhur gupta , Bibek Shrestha , vinay chopra !!!

Please try to solve this issue!


Well in this case, please advise your clients to use a single head such as "Reimbursement to Consultants" or "Professional Fee".

Also check that the A/c so created i.e. Reimbursement of travelling expenses to Consultants is not created under expense head. In this case they shall have to pay FBT.

Well in this case, please advise your clients to use a single head such as "Reimbursement to Consultants" or "Professional Fee".

Also check that the A/c so created i.e. Reimbursement of travelling expenses to Consultants is not created under expense head. In this case they shall have to pay FBT.

Well in this case, please advise your clients to use a single head such as "Reimbursement to Consultants" or "Professional Fee".

Also check that the A/c so created i.e. Reimbursement of travelling expenses to Consultants is not created under expense head. In this case they shall have to pay FBT.

Well in this case, please advise your clients to use a single head such as "Reimbursement to Consultants" or "Professional Fee".

Also check that the A/c so created i.e. Reimbursement of travelling expenses to Consultants is not created under expense head. In this case they shall have to pay FBT.

Sorry for the repeatations. I had some problems wid my PC.

thanx!!!

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