Tds on payment made to resorts
This query is : Resolved
CA Monika Jain
(Querist)
04 June 2013
If a tour operator co. book resort for its clients then what are the provisions for deducting tds on paymrnt to resort. Pls explain in detail
04 June 2013
194I will be applicable.10% t.d.s. is applicable if payment is above 180000 p.a.
CA Monika Jain
(Querist)
04 June 2013
194C WILL NOT BE APPLICABLE?
Ganeshbabu K
(Expert)
04 June 2013
Yes TDS is not applicable in your case,
TDS 194I is not applicable because contract with tour operator is considered as rate-contract agreement only.
please refer clarification provided in circular 5/2002 dated 30.07.2002
Explanation:
where corporate employers, tour operators and travel agents enter into agreements with hotels with a view to merely fix the room tariffs of hotel rooms for their executives/guests/customers. Such agreements, usually entered into for lower tariff rates, are in the nature of rate-contract agreements. A rate-contract, therefore, may be said to be a contract for providing specified types of hotel rooms at pre-determined rates during an agreed period. Where an agreement is merely in the nature of a rate contract, it cannot be said to be accommodation ‘taken on regular basis’, as there is no obligation on the part of the hotel to provide a room or specified set of rooms. The occupancy in such cases would be occasional or casual. In other words, a rate-contract is different for this reason from other agreements, where rooms are taken on regular basis. Consequently, the provisions of section 194-I while applying to hotel accommodation taken on regular basis would not apply to rate contract agreements.
TDS 194I is not applicable because contract with tour operator is considered as rate-contract agreement only.
please refer clarification provided in circular 5/2002 dated 30.07.2002
Explanation:
where corporate employers, tour operators and travel agents enter into agreements with hotels with a view to merely fix the room tariffs of hotel rooms for their executives/guests/customers. Such agreements, usually entered into for lower tariff rates, are in the nature of rate-contract agreements. A rate-contract, therefore, may be said to be a contract for providing specified types of hotel rooms at pre-determined rates during an agreed period. Where an agreement is merely in the nature of a rate contract, it cannot be said to be accommodation ‘taken on regular basis’, as there is no obligation on the part of the hotel to provide a room or specified set of rooms. The occupancy in such cases would be occasional or casual. In other words, a rate-contract is different for this reason from other agreements, where rooms are taken on regular basis. Consequently, the provisions of section 194-I while applying to hotel accommodation taken on regular basis would not apply to rate contract agreements.
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Ganeshbabu K
(Expert)
04 June 2013
Please refer Circular 715 dated 08-08-1995
it is not 194C , it will come under the definition of 194I
please refer Question no. 20 in above quoted circular
it is not 194C , it will come under the definition of 194I
please refer Question no. 20 in above quoted circular
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