Businesses recover costs and charges from different stakeholders including employees and entities across borders. The World of Tax categorizes these recoveries as recharges and disbursements. The tax treatment of these recharges and disbursements is sometimes perplexed. A simple answer often is – taxability is determined based on the underlying supply. It is therefore really important to understand what is the “Underlying Supply” in each context.
Source: gccfintax.com
