TDS on payment to Air Ticket Booking Agencies


08 September 2008

Is TDS applicable for payments to Air Ticket Booking Agencies?
Ifyes, TDS to be deducted as per sec194C?

Jitender (Expert)
08 September 2008

no tds is required to be deducted.

CA Rajesh S (Expert)
09 September 2008

TDS is required to be deducted u/s 194 C since it a contract for the booking of air tickets

Tanvi Shah (Querist)
10 September 2008

but if there is no contract between the company and the agency then TDS will be deducted as per Sec 194H i.e. Commission??

13 September 2008

No doubt the purchasing of tickets from the airline ticket agent or travel agent is a contract but tds is not deductible under section 194C on all the contracts so one should not conclude that if we are making a contract,then tds will also be applicable.This is my general reply .

But,I know you want specific ,the specific reason for not deducting the tax is circular no 715 dated 8.8.95 question number 6.which says that the contract of purchasing of ticket from travel agent or an airline is between the individual person and airline/travel agent though the payee is covered under person defined under section 194C(1),hence no tax is deductible u/s 194C.....

the above circular can also be made applicable for payment made to travel agent for railways,bus etc.

The relevant text of the circular is given

Question 6 : Whether payment under a contract for carriage of goods or passengers by any mode of transport would include payment made to a travel agent for purchase of a ticket or payment made to a clearing and forwarding agent for carriage of goods ?

Answer : The payments made to a travel agent or an airline for purchase of a ticket for travel would not be subjected to tax deduction at source as the privity of the contract is between the individual passenger and the airline/travel agent, notwithstanding the fact that the payment is made by an entity mentioned in section 194C(1). The provision of section 194C shall, however, apply when a plane or a bus or any other mode of transport is chartered by one of the entities mentioned in section 194C of the Act. As regards payments made to clearing and forwarding agent for carriage of goods, the same shall be subjected to tax deduction at source under section 194C of the Act.

Lalit aggarwal (Expert)
06 June 2015

is on commission of agent part also, no TDS if it is mentioned separately on invoice?

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