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Hotel expenses for hotel outside India

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Dipjyoti Majumdar

CA in service & CS. dipmaj@

2884 Points Posted on 23 November 2023

Dear Forum

Our employees will be travelling abroad for official work under contract with client and will stay at hotel. We will be paying from India to the hotel located in foreign country.

Will this payment to non resident entity from us invite RCM gst levy ?

Regards

CA Dipjyoti Majumdar

Replies (2)

Quick Summary

This discussion clarifies the tax implications for UK businesses paying for hotel stays abroad for employees on official work. It confirms that such expenses are generally deductible under Section 37(1) as business travel costs. Crucially, no Indian GST is applicable as the place of supply is outside India, and it's not considered an import of services under RCM. Furthermore, no TDS under Section 195 is typically required as the payment isn't income chargeable in India, and it's treated as a current account transaction under FEMA, not subject to TCS.

sabyasachi mukherjee

Profession

19978 Points Posted on 24 November 2023

Travelling expenses fir the purpose of business or official work is deductible expense subject to nature of employee working.

Aashok Kumar Sharma

Finance/Compliance Consultant

75653 Points Posted on 07 November 2026

Simple treatment:

• Hotel stay abroad for business is deductible under Sec 37(1) as travelling expenses.

• No Indian GST applies on hotel services abroad (place of supply outside India; no import of services under RCM, since the place of supply is the hotel's location under Sec 13(4) IGST).

• No TDS under Sec 195: payment to a foreign hotel for accommodation abroad isn't income chargeable in India.

• If paid via a corporate card or forex, it's a current-account transaction under FEMA, not LRS (the company isn't an individual). No TCS.

• Bills in foreign currency: record at the exchange rate on the payment date.