TDS and GST ITC on Membership fees to club

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42 Points Joined October 2024

Hi Sir

A Company is paying membership fees to a club for recreation of employees

Is it require to deduct TDS on Membership fees

Can we claim ITC on Membership fees

Thanks 

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On 15 January 2025 at 16:56 Report
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Master in Accounts & high court Advocate
9111 Points Joined December 2011

To determine if TDS (Tax Deducted at Source) is required on membership fees paid to a club for employee recreation and if ITC (Input Tax Credit) can be claimed:

TDS Applicability As per the Income Tax Act, 1961:

1. _No TDS on membership fees_: TDS is not applicable on membership fees paid to a club for employee recreation, as it is not considered a payment for a "work" or "service" under Section 194J. ITC

Eligibility As per the GST Act: 1. _ITC not eligible_: ITC is not eligible on membership fees paid to a club for employee recreation, as it is considered a "personal use" expense and not a "business use" expense under Section 17(5) of the CGST Act.

 However, there's an exception: 1. _If membership is for business purposes_: If the membership is primarily for business purposes, such as entertaining clients or promoting business relationships, ITC might be eligible.

To illustrate: - _Membership fees_: ₹50,000 per annum - _TDS applicability_: No TDS required - _ITC eligibility_: ITC not eligible (unless membership is for business 

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On 15 January 2025 at 19:24
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27936 Points Joined May 2017

A COMPANY IS PAYING MEMBERSHIP FEESVL TO CLUB. 

TDS IS NOT APPLICABLE.

BUT IF TDS IS DEDUCTED BY DRFAULT, IT MUST HE DEPOSITED.

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On 16 January 2025 at 12:30


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