GST and Income Tax

Our company Paid Rs. 50 Lacs on behalf of Subsidiary to Dealers and Distributors.

What are provisions applicable on this Transaction
Replies (6)
Its treated as Loan to subsidiary
Vipul this has no implication on gst and income tax.
Amount paid to subsidiary is treated as loan.
Actually our Company paid the amount against cash back scheme as incentive on sales to its dealers and distributors, the expenses belongs to Subsidiary (material sold by subsidiary) but booked in Holding books and paid from Holding.
It depends how you show it in your books of accounts.
But somehow expenses borne by holding company.
billing in subsidiary company.
That's why I need guidance how to show in books
Holding company should have paid to subsidiary and then subsidiary paying to Dealers/distributors.

What's the advantage for paying directly by Holding Co.

Is there any of TDS involved

Holding company to debit subsidiary Account for such payments and Subsidiary to debit incentive paid Account and credit to Subsidiary A/c.

please ensure companies Act provisions as far as holding subsidiary transactions are concerned.

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