Tds applicability on reimbursement

[pradeep kataria]

Co. X is using the services of CHA. CHA raises two bills for each transaction, in one bill he claims his agency charges etc. and another bill he claims the reimbursment of expenses incurred on behalf of Company X. Whether the COmpany X is suppose to deduct TDS on Reimbursement bill also. Please clarify with relevant citiation/Notification etc.

AI Summary

Debate on TDS Deduction for Reimbursed Expenses by Customs House Agents; PAN Requirement and Service Tax Rules Discussed. Company X uses the services of a Customs House Agent (CHA) who issues two bills: one for agency charges and another for reimbursed expenses incurred on behalf of Company X. The question is whether Company X should deduct TDS on the reimbursement bill. One response suggests that if the CHA incurs expenses on behalf of the company without profit, TDS should be deducted unless the CHA provides a PAN. Another response highlights that the issue is novel and will be settled by courts, referencing Service Tax rules where the CHA acts as a pure agent.