Tds on restaurant bill for food purchased

Dear All,

 

Please tell me whether TDS need to be deducted on food bill received from restaurant on which they have also charged service tax @ 4.944% i.e 40% of 12.36%.

And if it need to be deducted then under which section it need to be booked 194c,194j of 194I.if possible please provide the link of any notification which support your view and explain the logic .

 

regards,

Devendra Sharma

Replies (6)

According to me their should not be TDS deduction if you are paying Restaurant Bill because of Reimbursment or Consumption nature or if their is any contract between restaurant and you for supply of Food then their is liability arise for TDS deduction at rate of 2% or 1% according to status under 194C

correct me if their is update.

 

 

TDS is not required to be made when payment is made for serving food in a restaurant in the normal course of running of the restaurant/cafe.
— Circular : No. 715, dated 8-8-1995.

Thanks all for your kind replysmiley

Aftr going through sec-194C & circular no.715 dated 8-8-1995 which has been issued in lines of decided case law Associated Cements Ltd. I have the following conclusion:

1-

The provisions of section 194C shall apply to all types of contracts for carrying out any

"

work" including, transport contracts, service contracts, advertisement contracts,

broadcasting contracts, telecasting contracts, labour contracts, material contracts and

works contracts.

Explanation III to Section 194C(2)

For the purposes of this section, the expression

"work"

shall also include "Catering" .

2-Payments to restaurants/cafes - TDS is not required to be made when payment

is made for

serving food inside a restaurant in the normal course of running

of the restaurant/cafe

-Circular : No. 715, dated 8-8-1995

3-But if it is for an arrangement for specific person on a special request wchich can be termed as contract as contract includes oral contract as per indian contract act 1872 , so TDS in this situation need to be deducted.

 

What if the service provider is online Food Market place (aggregator) like "Justeat or foodPanda" kind? in this case would there be a TDS deduction on full invoice amount or TDS is applicable only on service/delivery charge? pls confirm.

Note: Invoice is being done by aggregator by himself on behalf of restaurant to end customer and Delivery Charge is extra which is being specified in the invoice separately (food product may be from Dominoz as an exp).

Invoice will look like; food products which are ordered and Service charge as separate line item. in this case TDS should be charged on Total invoice amount only or only on delivery amount?

Any new views on this query

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