TaxTMI 
TaxTMI 
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.
Tds applicability on reimbursement
10 Sep 2009 
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TDS on reimbursements: characterization as pure reimbursement or consideration determines withholding obligation.
TDS on payments to a CHA depends on whether charges are true reimbursements or consideration. If the CHA incurs expenses on behalf of the company, reproduces original receipts and takes no profit, those amounts are treated as reimbursements and their withholding treatment requires scrutiny; one view in the discussion says the company should deduct TDS on such transactions, though administrative rules affect transporters upon production of PAN. Where a CHA acts as a pure agent, service tax need not be levied on passed-through amounts, but tax or withholding consequences may rest with the principal when payments for carriage are routed through an agent. (AI Summary)
TDS on payments to a CHA depends on whether charges are true reimbursements or consideration. If the CHA incurs expenses on behalf of the company, reproduces original receipts and takes no profit, those amounts are treated as reimbursements and their withholding treatment requires scrutiny; one view in the discussion says the company should deduct TDS on such transactions, though administrative rules affect transporters upon production of PAN. Where a CHA acts as a pure agent, service tax need not be levied on passed-through amounts, but tax or withholding consequences may rest with the principal when payments for carriage are routed through an agent. (AI Summary)