Tds on canteen services

Sowmya.G (CA) (459 Points)

25 July 2015  

Dear All,

The company is letting out its premises for canteen operations. The company does not charge any rent instead the canteen supplies food free of cost to the employees and guests of the company. The company debits the dining expenses as labour welfare and credits the canteen/supplier account. There is no actual payment to the supplier but there are credits in the account. Could you please advise me whether TDS is applicable on this transaction? If yes could you explain with relevant case law if any.