Sowmya.G (CA) 25 July 2015
The company is letting out its premises for canteen operations. The company does not charge any rent instead the canteen supplies food free of cost to the employees and guests of the company. The company debits the dining expenses as labour welfare and credits the canteen/supplier account. There is no actual payment to the supplier but there are credits in the account. Could you please advise me whether TDS is applicable on this transaction? If yes could you explain with relevant case law if any.
CAclubindia Online Learning offers a wide variety of online classes and video lectures for various professional courses such as CA, CS, CMA, CISA as well as various certification courses on GST, Transfer Pricing, International Taxation, Excel, Tally, FM, Ind AS and more. know more
Rajagopalakrishnan R (PARTNER) 25 July 2015
If the food is supplied free of cost to employees amd guests, what is the logic in debiting labour welfare and creditiing Canteen contractor. Free of cost to whom, Employees or companyor both?? If contractor does not get paid anything at all, then how will the credit in his account get liquidated? I think you are missing a portion of the arrangement here. Please clarify so that the TDs angle can be examined.