Disbursements & Reimbursements

The following principles will help you determine whether the recovery of an expense from another party satisfies the conditions for being classified as a disbursement:
The other party should be the recipient of the goods or services;
The other party should be responsible for making the payment to the supplier;
The other party should have received an invoice or tax invoice, as the case may be, in its own name from the supplier;
The other party should have authorized you to make the payment on his behalf;
The goods or services paid for should clearly be additional to the supplies you make to the other party;
The payment should separately be shown on the invoice and you should recover the exact amount paid from the supplier, without a mark-up.

The following principles will help you determine when a recovery of expense amounts to a reimbursement:
You should have contracted for the supply of goods or services in your own name and capacity;
You should have received the goods or services from the supplier;
The supplier should have issued the invoice in your name and you are under the legal obligation to make payment for it;
In case of goods, you should own the goods prior to making the onward supply to the other party.

[nanduvadakkumvathukal]

When disbursement, the expense, we pay the expenses on behalf of the other party, so we pay the tax, too so if get the disbursed amount from other party, should we receive the vat amount too?