TDS Deduction on Travel Agent Invoice

1. This all depends on the nature of the contract between Air travel agency and the Airline company. 
2. If you look at the contract, the agency will sell the tickets only on behalf of the airline company. They do not buy the ticket as such. In other words, the risk of not selling the tickets still lies with the airline company. Travel agency merely acts as an agent where they make advertisements and facilitate with the customers in selling the tickets. 
3. For the above service, the agency will charge a fee based on the number of tickets sold and the amount collected from customers. 
4. So, even though all the above business comes under the contract, the nature of income for the agency is commission. Hence, TDS needs to be deducted u/s 194H @ 5% if the amount paid during the year exceeds Rs. 15,000. 
Please correct me if the above solution has an alternative view. 

1. Better consult the travel agency and inquire how people normally deduct TDS for the payment. 
2. Sec 194C is also possible since your payment is only in relation to the ticket, which is revenue for airline companies. And it falls under the category of the contract between you and the airline company and whatever the amount you are paying is revenue which requires TDS u/s 194C.
3. With limited information, I have given you the above reply. Better to go with the auditor's view. 
Please correct me if the above solution has an alternative view. 

1. There will not be any specifications regarding TDS in the service contract. Whatever the amount you are paying is only to the airline company. 
2. Airline companies will pay commission income to Air travel agency after the sale of tickets. It is their responsibility to deduct TDS u/s 194H when making the payments to the air travel agency.  
3. In other words, agency is doing its job of collecting money from you and remitting the same to the airline company after deducting a commission. This is how a normal agency and airline business works. There could be some other agreements to between airline companies and agency companies. 
4. Based on the limited information, TDS 194C only needs to be deducted on buying the tickets from the agency. 
Please correct me if the above solution has an alternative view. 

Originally posted by : Vipul Acharya
	whether TDS to be deducted on Travel Agent Service Charges for Air -Ticket Bookingsif yes, is it under 194C or what

Yes, TDS is applicable on their service charge. But don't deduct tax from the air ticket price, only service charges.

194C

(3) Where any sum is paid or credited for carrying out any work ..., tax shall be deducted at source-

(i) on the invoice value excluding the value of material, if such value is mentioned separately in the invoice