Canteen, Uniform or Training expense not covered under FBT!
Someone asked on A Yahoo Group
Our client is an exporter of fish having turnover of more than 20 crores. He is having “Canteen Expenses” as one of the expenses. There is a canteen for workers in his factory. Is this expense liable to Fringe Benefit Tax.
He is also having “Uniform Expenses” as one of the expenses. Now, this uniform is provided to all the workers including gloves, cap, apron & dress as it is required to keep the quality of the exported product. Is this expense liable to Fringe Benefit Tax.
He is also having “Training Fees” as one of the expenses. This training fees is the fees paid to fresh workers after appointment as this field requires expertisation. Please let me know whether FBT is applicable on above or not ?
> Ritesh Rathi
Canteen expense for workers is not under FBT as per section 115WC(1)(c) of I T Act , FBT is not applicable on “any expenditure on or payment for ,food or beverages provided by the employer to his employees in office or factory
“Uniform Expenses is also not expressly included in Deemed FBT benefit, but since it is not a privilege of ant type since the uniform is dress for workers and can not be in any way called perquisite or any kind of privilege or facility or right or service.
“Training Fees” is not specifically given under deemed FBT and if it is given to fresh workers, it also is purely business expense and in no way can be termed as perquisite or any kind of privilege or facility or right or service. So this will also be out of FBT.
Please also refer Circular No. 8/2005 which says that training expenses inhouse are exempt, but training expenses incurred outside office may be liable…