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

Fuel Reimbursements for Motorbikes May Qualify as 'Conveyance' Under Fringe Benefit Tax, Raising Revenue Authority Concerns. A query was raised regarding the classification of fuel reimbursements for employees using motorbikes for business purposes under the Fringe Benefit Tax (FBT) provisions. It was questioned whether such expenses could be categorized under 'Conveyance' instead of 'Repairs and Maintenance of Motor Car.' Although the term 'Conveyance' is not explicitly defined in the Act or Circular, it is generally interpreted as expenses incurred by employers to provide conveyance facilities. A respondent agreed that fuel reimbursements could be considered under 'Conveyance,' but there was concern about potential challenges from Indian Revenue authorities.