Tds on sale promotion
This query is : Resolved
30 June 2012
If a company giving some payment to a consultant for hotel booking at various places in India....and booked the exp. as sale promotion expenses...then is there any liability to deducted the tds...
30 June 2012
Depends on the bill you have and the name of payee. If you are paying to a consultant and the bill is in the name of consultant then you may show it as reimbursement of expenses in that case you will not have to deduct TDS provided consultant submits a bill showing the amount as reimbursement. But how can you show this as Sales Promotion Exp.
30 June 2012
The payments are being made to a Person who is engaged for managing the hotel booking.
The person can be said to be a contractor for doing such type of work. TDS is required to be deducted U/s 194C.
The person can be said to be a contractor for doing such type of work. TDS is required to be deducted U/s 194C.
02 July 2012
Thanks for your replies and concerning attitude....but....my query is we are a company and we are getting the services from a hotel group XYZ Tours Pvt Ltd. for booking of different hotels, rooms at different places in india (Hotels of this Group)..without any contract or not on regular basis of room (specified room)...and that XYZ Pvt Ltd issued a bill in the name of company with GST 1.24%...now i want to know that is there any obligation to deduct TDS on such bills....
27 July 2025
Here’s a clear explanation about **TDS on payments for hotel bookings/service charges related to sale promotion:**
---
### Situation Summary:
* Your company is paying **XYZ Tours Pvt Ltd** (a hotel group) for booking hotel rooms at different places.
* The bills are in the company’s name with GST charged.
* The hotel bookings are made **without any fixed contract or regular booking**, just ad hoc.
* You want to know if TDS is deductible on such payments.
---
### Key Points:
#### 1. **Nature of Payment:**
* Payment to a hotel or travel agent for booking hotel rooms is considered a **payment for services**.
* These services may be classified as **"Contractual Services"** or **"Commercial or Business Services"**.
* Since GST is charged by the hotel group, it confirms this is a **supply of service**.
#### 2. **Which TDS section applies?**
* **Section 194C** applies to **payments to contractors** for carrying out any work including supply of labor for carrying out any work (like contract work).
* **Section 194J** applies to **professional fees and technical services**.
* For **hotel services, lodging, accommodation**, TDS is generally **not deductible** if it is purely a commercial service (like rent paid to a hotel).
* However, if the payment is for **contractual services (like event management, booking services as contractor)**, then **TDS under 194C** may apply.
#### 3. **Is TDS mandatory on hotel booking payments?**
* Payments made **directly to hotels** for accommodation or room charges are generally **not subject to TDS**.
* If you pay to a **travel agent or consultant** (like XYZ Tours Pvt Ltd) for managing hotel bookings, this can be considered a **contractual service**.
* Hence, **TDS under section 194C @1% or 2% (depending on nature of party)** may be applicable on the **service portion** of the bill.
#### 4. **Since GST is charged:**
* The TDS is to be deducted **on the amount excluding GST**.
* So, deduct TDS on **service value excluding GST**.
---
### Summary:
| Scenario | TDS Applicability |
| ----------------------------------- | --------------------------------------------------------------------------- |
| Payment to hotel for room rent | Generally **No TDS** |
| Payment to travel agent for booking | **Yes, TDS under Section 194C** applicable on service portion excluding GST |
| Payment to consultant for services | **Yes, TDS under Section 194J or 194C** depending on service nature |
---
### What you should do:
* Check the nature of service from XYZ Tours Pvt Ltd.
* If it’s a travel agency/consultant managing bookings = deduct TDS under **Section 194C**.
* Deduct TDS on the **amount excluding GST**.
* Obtain their PAN for correct TDS deduction.
* Issue TDS certificate to them.
---
If you want, I can help draft a sample TDS calculation or a reply to the hotel group. Want me to?
---
### Situation Summary:
* Your company is paying **XYZ Tours Pvt Ltd** (a hotel group) for booking hotel rooms at different places.
* The bills are in the company’s name with GST charged.
* The hotel bookings are made **without any fixed contract or regular booking**, just ad hoc.
* You want to know if TDS is deductible on such payments.
---
### Key Points:
#### 1. **Nature of Payment:**
* Payment to a hotel or travel agent for booking hotel rooms is considered a **payment for services**.
* These services may be classified as **"Contractual Services"** or **"Commercial or Business Services"**.
* Since GST is charged by the hotel group, it confirms this is a **supply of service**.
#### 2. **Which TDS section applies?**
* **Section 194C** applies to **payments to contractors** for carrying out any work including supply of labor for carrying out any work (like contract work).
* **Section 194J** applies to **professional fees and technical services**.
* For **hotel services, lodging, accommodation**, TDS is generally **not deductible** if it is purely a commercial service (like rent paid to a hotel).
* However, if the payment is for **contractual services (like event management, booking services as contractor)**, then **TDS under 194C** may apply.
#### 3. **Is TDS mandatory on hotel booking payments?**
* Payments made **directly to hotels** for accommodation or room charges are generally **not subject to TDS**.
* If you pay to a **travel agent or consultant** (like XYZ Tours Pvt Ltd) for managing hotel bookings, this can be considered a **contractual service**.
* Hence, **TDS under section 194C @1% or 2% (depending on nature of party)** may be applicable on the **service portion** of the bill.
#### 4. **Since GST is charged:**
* The TDS is to be deducted **on the amount excluding GST**.
* So, deduct TDS on **service value excluding GST**.
---
### Summary:
| Scenario | TDS Applicability |
| ----------------------------------- | --------------------------------------------------------------------------- |
| Payment to hotel for room rent | Generally **No TDS** |
| Payment to travel agent for booking | **Yes, TDS under Section 194C** applicable on service portion excluding GST |
| Payment to consultant for services | **Yes, TDS under Section 194J or 194C** depending on service nature |
---
### What you should do:
* Check the nature of service from XYZ Tours Pvt Ltd.
* If it’s a travel agency/consultant managing bookings = deduct TDS under **Section 194C**.
* Deduct TDS on the **amount excluding GST**.
* Obtain their PAN for correct TDS deduction.
* Issue TDS certificate to them.
---
If you want, I can help draft a sample TDS calculation or a reply to the hotel group. Want me to?
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