Tds applicability on bills of hotels
Querist : Anonymous
whether tds is attracted on such payments by the company to hotels
Please Advice
Thank You
Querist : Anonymous
Querist : Anonymous
Guest
However, the same needs to be deducted only if the accommodation is taken on a regular basis. (Refer Circular No. 715, Year 1995)
if the transaction involved results in catering, then TDS shall be deducted u/s 194C as the same is included in the definition of Work u/s 194C of the act.
Querist : Anonymous
The payments are made for clients, auditors etc whoever visit the company for any purpose
& the bills include their for their room charges, food,etc
so whether this will cover in 194c or 194i
Guest
"Furthermore, for purposes of section 194-I, the meaning of ‘rent’ has also been considered. "‘Rent’ means any payment, by whatever name called, under any lease . . . or any other agreement or arrangement for the use of any land. . . ." [Emphasis supplied]. The meaning of ‘rent’ in section 194-I is wide in its ambit and scope. For this reason, payment made to hotels for hotel accommodation, whether in the nature of lease or licence agreements are covered, so long as such accommodation has been taken on ‘regular basis’. Where earmarked rooms are let out for a specified rate and specified period, they would be construed to be accommodation made available on ‘regular basis’. Similar would be the case, where a room or set of rooms are not earmarked, but the hotel has a legal obligation to provide such types of rooms during the currency of the agreement."
So if you have a contract or the hotel is obligated to provide you rooms of your specification everytime you seek them, then its rent u/s 194I. If however, you have an arrangement for a specified rate(after discount) and you only take the accomodation as needed but the Hotel could choose to deny your booking if it had alternative bookings or is fully booked, it is not rent u/s 194I and therefore no TDS is required to be deducted..
Guest
Querist : Anonymous
THE EXACT SCENARIO IS THAT THE COMPANY IS CONTINUOUSLY MAKING PAYMENTS TO HOTELS W.R.T. BILLS RAISED RELATED TO CLIENTS, AUDITORS, FOREIGNERS VISIT REGARDING THEIR STAY,FOOD ETC.
HOTELS PROVIDE BUSINESS PROPOSAL LETTER TO THE COMPANY CONTAINING ALL DETAILS SUCH AS ROOM TARRIFS, FOOD, DISCOUNTS, PICK & DROP FACILITY ETC ON THE BASIS OF WHICH NEGOTIATIONS HAVE BEEN MADE ON EMAIL WITH HOTELS & A HARD COPY OF SUCH EMAIL IS SIGNED BY THE OFFICIALS OF THE COMPANIES.
ON THE BASIS OF WHICH HOTELS CHARGES BILLS TO COMPANY.
HOTELS CHARGES SERVICE TAX ALSO.
NOW PLEASE ADVICE WILL IT COVERED BY TDS PROVISION OR NOT
Guest
https://www.caclubindia.com/experts/tds-on-service-tax-component-1211489.asp
1)No TDS applicable if it is just rate contract agreement(Your case looks like rate contract agreements)
2)However some companies do deduct TDS on safer side even in case of Rate contract agreements,But please deduct as per section 194I and not as per Section 194C.
3)No TDS applicable on food,beverages etc.
4)if you want to deduct TDS in my opinion it should be @10% under section 194I.
(do we deduct tds under 194C just because we have contract for internal audit with chartered accountant?).
So pls deduct tds UNDER 194I
Pls refer to link given above.
Querist : Anonymous
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