Tds on fee for hotel accomodation
This query is : Resolved
Ramalinga H.B
(Querist)
05 March 2012
Hello Experts, Need your expert advice!
My client is a tour operator who conducts tours like "makemytrip" company and who collects a lumpsum fee from the customer. In tern he will have an understanding with hotel and book the room with a concessional rate but the bill will be in the name of the ultimate customer. My client will make the payment out of the fee collected from customer but he doesn't deduct any tds? Will this transaction attracts 194I?
Thanks in Advance
My client is a tour operator who conducts tours like "makemytrip" company and who collects a lumpsum fee from the customer. In tern he will have an understanding with hotel and book the room with a concessional rate but the bill will be in the name of the ultimate customer. My client will make the payment out of the fee collected from customer but he doesn't deduct any tds? Will this transaction attracts 194I?
Thanks in Advance
Krishna Mohan
(Expert)
05 March 2012
The agreement between your client and the respective hotels is of selling rooms and it in no way consists of taking rooms on rent. He only acts as an agent between the hotel and prospective customer. The collection of payments from the customer will be for and on behalf of the hotel. Hence, section 194I will not apply in the given case.
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