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TDS on hotel and restaurant bill

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Anirudha

CA-IPCC

158 Points Posted on 26 November 2021

Hi Sir,

Is the TDS is applicable for Guest house/ Hotels towards accommodation charges for official expenses, IF yes, which section is applicable and what is rate of TDS.

Regards

Anirudha Biswal

Replies (2)

Quick Summary

This discussion clarifies whether Tax Deducted at Source (TDS) is applicable to accommodation charges for guest houses and hotels when used for official expenses. The consensus is that TDS is generally not required for these transactions as they are not typically covered under the specified categories for TDS deduction. The content also touches upon service tax implications for restaurant bills, differentiating between dine-in and outdoor catering services.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 26 November 2021

When goods, being food or any other article of human consumption or any drink (whether or not intoxicating) are supplied in any manner as a part of the activity, at a restaurant, service tax is chargeable on 40% of the gross amount.

However, when the same service is in the form of outdoor catering, service tax is chargeable on 60% of the gross amount.

Gross Amount means the sum total of the amount charged and the fair market value of all goods and services supplied in or in relation to the supply of food or any other article of human consumption or any drink (whether or not intoxicating), whether or not supplied under the same contract or any other contract, after deducting-

(i) the amount charged for such goods or services, if any; and

(ii) the value added tax or sales tax, if any, levied thereon.