Expert Advisory Committee
ICAI-Expert Advisory Committee
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3.1  Query

 

Meaning of the term ‘billed’ under Category ‘C’ of Part II of

Schedule XIII to the Companies Act, 1956.

 

1.Category ‘C’ of Part II of Schedule XIII to the Companies Act, 1956, provides as below:

 

“Provision of car for use on company’s business and telephone at residence will not be considered as perquisites. Personal long distance calls on telephone and use of car for private purpose shall be billed by the company to the individual appointee concerned.”

 

2.The querist has further mentioned that Part II of the aforesaid schedule states that unless the context otherwise requires, perquisites are classified into three categories, namely, A, B and C. In the view of the querist, if the meaning of the word ‘billed’ means to ‘recover’, then there will be no perquisite under Category ‘C’. The querist has sought the opinion of the Expert Advisory Committee as to whether that is the real intention of law or whether ‘billed’ means only ‘quantification’ of the perquisite value for the purpose of including it under the overall limit of Rs. 1,35,000/- or Rs. 1,15,000/-, as the case may be.

 

                                                                  Opinion                                       September 17, 1990

 

1.The Committee is of the view that Category ‘C’ of Part II of Schedule XIII to the Companies Act, 1956, lays down benefits which are not ‘perquisites’ for the purposes of that Schedule.

*.However, whereas the expenditure on provision of car for use on company’s business and telephone at residence will be borne by the company, the expenditure on personal long distance calls on telephone and use of car for private purpose shall be borne by the individual appointee concerned.

 

2.The Committee is accordingly of the opinion that the term ‘billed’ should be taken to mean to ‘recover’.

 

* This view is supported by a clarification of the Department of Company Affairs, issued on 22nd November, 1983, in respect of Guidelines on Managerial Remuneration, issued on 1st April, 1983. This clarification is relevant because the wording of Part ‘C’ of sub-para III of the said Guidelines and that of Category ‘C’ of Part II of Schedule XIII are the same. The clarification states inter alia:

 

   “Part ‘C’ of sub-para III mentions facilities which are not to be considered as perquisites.”