21 December 2015
Dear Experts, My company has hired A mechanical engineer to repair it's machinery, however expenses incurred by engineer like hotel, food, travelling etc. Is to be reimburse to engineer by company later, query 1) should i made TDS on this reimbursement to engineer. 2) weather company is liable to pay ST on this engineer service under RCM. 3) weather company is liable to pay ST on the amount which is to be reimburse to engineer..
21 December 2015
1 If it is a reimbursement against actual expenses and no profit element no TDS applicable. 2 No RCM applicable on hiring of engineer. 3 No ST if actual payments are claimed.
21 December 2015
As per section 194J of Income tax 1961, TDS required to amount paid or Amount credited in books of Account for such expenses. And expenses not only include consultancy fees but also reimbursement of expenditure... Therefore TDS provisions will be applicable.
As far as Service Tax is concerned... Rule 5 of service tax valuation rules 2006 specifically includes such charges for the purpose of levy of Service Tax, except in case of Pure Agents... Therefore Service tax will also be applicable...
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