Opinion Of Eminent Legal Luminaries On Controversial Issues

Whether On Reimbursement Of Expenses TDS Is Required?

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.
ANSWER: 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].

Posted in Income-tax

Leave a Reply

Your email address will not be published. Required fields are marked *


Credit: Several of the queries and answers are reproduced with permission from the AIFTP Journal. We thank AIFTP for generously allowing us to host their research material.
Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or a formal recommendation. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. Neither the author nor itatonline.org and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon. No part of this document should be distributed or copied (except for personal, non-commercial use) without express written permission of itatonline.org