Clarification - conveyance expenses

[Rahul Bagaria]

Fuel reimburesements in relation to motor bikes used by the employees for the purpose of business cannot be covered under 'Repairs and Maintenace of Motor Car' under FBT provisions.Is there a possibility of including the same under the head 'Conveyance'.Ordinarily,the term 'Conveyance'is interpretted as an expenditure incurred by the employer to provide a conveyance facility to the employees and not re-imbursement of fuel expenses (in the context of FBT, only conveyance provided to employees for official purposes is liable to FBT). However, given that the term 'Conveyance' has not been specifically defined under the Act or in the Circular, a view may be taken that 'Conveyance' head includes expenditure on reimbursement of local conveyance expenses incurred by the employees using own motor bikes, for official purposes.Please give opinion whether we can go ahead with this logic.Can this position could be questioned by the Indian Revenue authorities.

[Ravi Chopra]

I think, you are right, fuel reimbursements would be covered by the term "conveyance".

AI Summary

Conveyance classification may include fuel reimbursements for employee-used motorbikes, exposing the position to challenge by tax authorities. Whether employer reimbursements for fuel for employee-owned motorbikes fall under conveyance for Fringe Benefit Tax is arguable because the term is undefined; one view accepts such reimbursements as local conveyance for official purposes, but the position may be open to challenge by tax authorities and requires justification of the nexus to official conveyance.