Search Results For: reimbursement


QUERY: Assessee engaged in imports and/or exports engage services of Clearing and Forwarding (C & F) agents. Payments to such C & F agents typically comprises of following:

(a) Reimbursement of freight paid to shipping companies or airlines.

(b) Reimbursement of freight on local transportation.

(c) Reimbursement of import or export clearing expenses like payments to Port Trust, Airport Authorities of India, miscellaneous charges, etc.

(d) Reimbursement of bonded warehousing charges.

(e) Reimbursement of Customs duties and Octroi.

(f) Reimbursement for Crane and Machinery charges to Port Trust. etc.

(g) Agency service charges.

(h) Service tax.

Whether any tax is liable to be deducted u/s. 194C of the Income-tax Act, 1961 on any of the above payments to C & F agents?
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In ITO vs. Dr. Willamer Schwable India (P) Ltd. [3 SOT 71 (Del.)], the Tribunal has held that reimbursement of actual expenses where no profit element is involved, is not liable for the TDS. Similarly, it has been held by the Delhi High Court in Handicrafts & Handloom Export Corpn. of India vs. ITO [140 ITR 532]; that the amounts received by an assessee

QUERY: ABC Pvt. Ltd., is engaged in the business of manufacturing of coke. The company purchases raw material from another company XYZ Ltd. As per agreed terms, ABC Pvt. Ltd., had reimbursed certain expenses incurred by XYZ Ltd., towards ground rent, wharfage charges, stevedoring charges, etc. The reimbursement does not contain any mark up and bills of actual services provided on XYZ Ltd., along with debit note for reimbursement of expenses. These expenses are accounted in the books of ABC Pvt. Ltd., and profit and loss account reflects each such expenses separately.

(a) Whether ABC Pvt. Ltd., is liable to deduct TDS on reimbursement of expenses to XYZ Ltd.
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On reimbursement of expenses no TDS is required to be deducted as per judgment of the Supreme Court in GE India Technology Centre Pvt. Ltd., v. CIT [327 ITR 456].