Tds on restaurant bill

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 January 2016 Dear Experts, my employer has arranged a party for it's emoloyee on new year therefore all the employee having party at nearly hotel however the hotel has raised the invoice of food i.e. 37000 basic 14.5% vat on 37000 and 5.8% ST, total bill amount 44511/- query..1) weather this exp. is deductable or not.2) weather TDS is to be made or not if yes how much and under which section..... Thanx & Regard Raju Jain

Ganeshbabu K

Ganeshbabu K (Expert)
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29 January 2016 In case a company organizes a dinner party at a hotel, it may not be called a “works contract” under Section 194C of the Income Tax Act as it may not be a “catering service contract” but only availing of services of waiters and facilities which are already available with the hotel. The guests go to the hotel and dine; it is a simple contract for sale of goods. Serving food to the customers is part and parcel of the duty of the hotel staff in pursuance of the contract for the provision of food.

However, if the same company arranges a dinner within its own premises (say, on its own lawns), then TDS will have to be deducted under Section 194C as in this case, the company hires hotel staff to manage the service of eatables, etc. at the party. Within the hotel, catering was their job anyway. But on the company premises, they're clearly "carrying out a piece of work" outsourced to them. It is no longer a contract for the mere sale of eatables, notwithstanding that VAT may have been charged in the bill. The TDS will have to be deducted on the entire amount paid to the hoteliers.

Querist : Anonymous

Querist : Anonymous (Querist)

29 January 2016 sir.. will TDS be deduct on total bill amount 44511/- including vat and ST also.. plzz clarify...

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Ganeshbabu K

Ganeshbabu K (Expert)
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29 January 2016 If TDS Applicable in your case as explained in my earlier reply,.deduct TDS excluding vat and servicetax.

Querist : Anonymous

Querist : Anonymous (Querist)

29 January 2016 sir.. in your earlier reply your point of view was if the company arrange the dinner party within its own premises ( say on its own lawns) plzz tell me what di you means by arranging dinner within its own premises kindly explain with an example if possible..

Ganeshbabu K

Ganeshbabu K (Expert)
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29 January 2016 where is party happened,if party happened in hotel dont deduct TDS,
if happened elsewhere deduct tds

Querist : Anonymous

Querist : Anonymous (Querist)

29 January 2016 sir... as per your view if party was arranged at hotel premises then TDS will Not attract.. my query is.. hotel has charged 5.8% ST thats means they have consider 40% value as service partion.. so i think Tds should be deduct on 40% value doesn't matter waether we have arranged the dinner party at hotel premises or anywhere else... please clarify my doubt...

Ganeshbabu K

Ganeshbabu K (Expert)
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30 January 2016 you are wrong in your decision of deducting TDS
TDS liability will not depend on servicetax applicability.servicetax applicable on sale of food in AC restaurents.,even KFC kind of stores also charge servicetaxthough there is no service actually,

Please read my first reply where i have given answer very detailed way,Please read again carefully and analsye your case with my words,

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Querist : Anonymous

Querist : Anonymous (Querist)

02 February 2016 Dear Ganesh sir.. please solve my this query its really urgent...... A proprietor had sold his car on 25/3/2016 of Rs. 250000 and the WDV of this car was 210000 on 1/4/2015 hence the loss of 40000 however the proprietor has purchased New car Rs. 447327 on 31/3/2016.. plzz tell me as this loss is not deductable.. accordingly let me know the accounting entry of both the car considring the loss also....

Ganeshbabu K

Ganeshbabu K (Expert)
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12 February 2016 Caluculate wdv of block and charge depreciation on wdv. deduction of loss doesnot arise.

Opening WDV
+additions DURING THE YEAR
Less-sales during the year
=closing WDV

Querist : Anonymous

Querist : Anonymous (Querist)

13 February 2016 plz let me know the accounting entry as per my above query...