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FBT

CA Kamlesh Dama (TAX CONSULTANT) (105 Points)

09 January 2008

Plz do reply,
If a auditor incurred expenses for tour,travels for assigning audit work and then after whole expenses are reimbursed by the client ,then who is liable for FBT?

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5 Replies

Amit Sharma (article) (2677 Points)
Replied 09 January 2008

no its no liable for FBT, ref circular of fbt question no.13 which clearly states that FBT is not liable in the hands of the client.

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suman nvss y (article assitant) (147 Points)
Replied 09 January 2008

AUDITOR IS LIABLE FOR FBT. SINCE THE EXPENDITURE ON TRAVELLING, HOTEL ETC IS INCURRED BY THE COMPANY (IN THIS CASE AUDITOR) AND NOT BY THE CLIENT , THE COMPANY IS LIABLE TO FBT IN RESPECT OF SUCH EXPENDITURE. HOWEVER THE CLIENT WILL NOT BE LIABLE TO FBT IN RESPECT OF PAYMENT FOR SUCH EXPENDITURE.

ASHISH YADAV (Chartered Accountant) (119 Points)
Replied 17 January 2008

dear kamlesh, first of all the auditors are mainly properitory and partnership firms in india not pvt. ltd company ,so there is no question of fbt. and client rembuirshed the bill so it will be not fbt in hands of client

girish mangla (practice) (206 Points)
Replied 21 January 2008

there is no chargeability of FBT in case of reimbursement of expenditures. it is chageable on whom , who incurrs actually.if ca firm is proprietorship then there is no question of FBT and in case of parnership it is applicable

M.Sriram Shenoy (CA Final) (814 Points)
Replied 14 February 2008

FBT is very well attracted. FBT will be charged on expenses incurred by the assessee which fall under the ambit of FBT, even if such expenses are reimbursed to the him. FBT is ATTRACTED.