FBT on Foreign Tour & Food & Beverages

This query is : Resolved

Guest

Guest (Querist)

17 October 2008 Hi Experts,

I am confused about FBT provisions in following cases.

==>Food & Beverages:
1. We have our own kitchen within factory, for providing foods to our empoyees and incurring exp. on the same. As per my opinion there is no FBT applicable in this case. Right or Wrong?

2. During office hours we are providing food to employees or others and the said food is purchased from the hotels and served the same within office or facotry premises. As per my view FBT will not be applicable to this case. Right or Wrong? What will be position if exp. on such transaction is incurred by empoyee and later on reimbursed by company.?

3. During office hours employee remained out side office for office work and he has taken luch at some restaurant and the exp. is either paid or reimbursed by the company. As per my opinion FBT will be paid on such case as the food is provided outside factory.

==> Foreign Travelling:
1. Exp. on foreign travelling include Hotel, ticket & food.
2. Exp. is incurred for Director and his wife (wife is not a director).
3. Exp. is incurred for personal Foreign Tour.

In above situation, whether FBT on the Hotel & Food exp. will be paid as per provisin related to Tours & Travelling Exp. (5% clause) or shall be treated separetly as per Hotel & Food cluase of FBT (20% Clause)

Whether Exp. related to director's wife will be disallowed from computatin of income or FBT can be paid and the same can be taken as expenditure.?

thanks
Rohit

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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17 October 2008 1.No FBT
2.No FBT. If the transaction is incurred by employee and reimbursed latter, FBT is applicable on reimbursement.(because it is food taken by employee not within the premises).
3.FBT is applicable.

You can treat travel and hotel bill separately
Payment of FBT does not make expenditure on director's wife eligible for deduction.