Reimbursement of Actual Expenses

[zurpk]

Our company has made an agreement with ABC Company for services. According to the agreement, ABC shall give us their services and we shall pay to them at time of completion of the agreement. Our company is also liable to reimburse all their actual expenses while performing tasks of the agreement.

While performing tasks of the agreement, ABC purchased a GSM connection and deposited a security of Rs. 6,000.00 for the connection. So here total expenses made for the connection is Rs. 8,000.00.

I am sure that we shall deduct tax @ 6% when we shall pay their consultancy fee. However, I have the following question about the above discussion

1 Whether we shall deduct any tax while reimbursing their actual
expenses to them?
2 What will be the accounting treatment of the security deposited
by them? Whether we shall deduct any tax while reimbursing
security to ABC?

I shall be thankful for an early reply.

Thanks.