Our company Paid Rs. 50 Lacs on behalf of Subsidiary to Dealers and Distributors.
What are provisions applicable on this Transaction
6 Replies
Gunasekhar
(Student CA IPC / IPCC)
(51 Points)
Replied 14 September 2019
Its treated as Loan to subsidiary
sabyasachi mukherjee
(27574 Points)
Replied 14 September 2019
Vipul this has no implication on gst and income tax.
Amount paid to subsidiary is treated as loan.
Amount paid to subsidiary is treated as loan.
Vipul Acharya
(Account Officer)
(647 Points)
Replied 15 September 2019
Actually our Company paid the amount against cash back scheme as incentive on sales to its dealers and distributors, the expenses belongs to Subsidiary (material sold by subsidiary) but booked in Holding books and paid from Holding.
sabyasachi mukherjee
(27574 Points)
Replied 15 September 2019
It depends how you show it in your books of accounts.
But somehow expenses borne by holding company.
billing in subsidiary company.
But somehow expenses borne by holding company.
billing in subsidiary company.
Vipul Acharya
(Account Officer)
(647 Points)
Replied 15 September 2019
That's why I need guidance how to show in books
Kapadia Pravin
(17259 Points)
Replied 22 September 2019
Holding company should have paid to subsidiary and then subsidiary paying to Dealers/distributors.
What's the advantage for paying directly by Holding Co.
Is there any of TDS involved
Holding company to debit subsidiary Account for such payments and Subsidiary to debit incentive paid Account and credit to Subsidiary A/c.
please ensure companies Act provisions as far as holding subsidiary transactions are concerned.
What's the advantage for paying directly by Holding Co.
Is there any of TDS involved
Holding company to debit subsidiary Account for such payments and Subsidiary to debit incentive paid Account and credit to Subsidiary A/c.
please ensure companies Act provisions as far as holding subsidiary transactions are concerned.
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