Reimbursement of expenses..

[Reshma kochar]

Dear Experts,

Our Co. is one of the subsidiary of a foreign Co...Which pays comman insurances, internet usages say leased lines or licence procurements for its all subsidiaries.. My question is - Will  withholding or service tax liability comes on us or not? 

AI Summary

Clarification on Withholding Tax and Service Tax for Reimbursements under Section 195; Comprehensive Review Advised A subsidiary of a foreign company inquires about the applicability of withholding and service tax on reimbursements for shared expenses like insurance and internet usage. An expert clarifies that withholding tax applies if the holding company earns income from these services, as per Section 195. However, service tax is not applicable since the reimbursements do not involve service rendering. Another expert advises caution due to incomplete facts, suggesting a comprehensive review of all circumstances and provisions before making conclusions. The inquirer acknowledges the responses.