TDS on Hotel payment on behalf of client.

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This discussion addresses a company's query regarding Tax Deducted at Source (TDS) when they pay hotels on behalf of clients, invoice the client with a markup, and the client deducts TDS on the full amount. The user seeks clarification on whether the TDS rate should be 10% or 2%, and if they can issue separate invoices for hotel charges and their markup to have TDS deducted only on the markup. The advice provided suggests that TDS at 2% under Section 194C is applicable on the entire bill value, including the markup.

richa

richa (Querist)
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29 April 2022 Sir, My company make payment to Hotel on the behalf of my client but take invoice in its name . then we bill to client after adding our markup. the client deducts TDS on entire amount. it is not possible to take bill from the vendor in the name of my client. Please suggest
(1) What should be the rate of TDS 10% or 2% .
(2) is it possible I send two bills to my client one for actual Hotel charges and other for my mark up, and client deduct TDS only on my mark up. I again mention that its not possible to take bill from hotel in the name of my client. The bill has to be in my company name .

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 April 2022 1 10% TDS applicable.
2 TDS applicable on full amount including your markups.

richa

richa (Querist)
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30 April 2022 Thank you sir for your reply. Please let me know in which section TDS is charged @10%. As I am not providing any service which needs any expertise.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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30 April 2022 TDS at 2% under section 194c applicable on entire bill value.

richa

richa (Querist)
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01 May 2022 Thank you so much sir.

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