TDS ON RESTAURANT BILL PAYMENT

This query is : Resolved

Ram Das Garg (Querist)
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20 March 2009 HI
AS WE KNOW SEC 194 C IS APPLICABLE TO CONTRACT FOR JOB WORK. SUPPOSE WE ARE HAVING A SINGLE HOTEL FOR THE STAY OF OUR GUESTS & CLIENTS. WHEN WE RECEIVES THE BILLS FROM HOTEL IT HAVE TWO COMPONENTS ONE IS " SALE OF FOOD ' & OTHER IS ' SERVICE CHARGES ". IN THIS ARE WE LIABLE TO DEDUCT TDS IF THE SERVICE CHARGES ALONE DOES NOT EXCEED RS. 50000 IN A YEAR BUT SUM OF BOTH COMPONENTS EXCEEDS THE 50000 RS.

WAITITNG FOR YOUR KIND HELP.
RAM DAS GARG

Shyam Lal Naik

Shyam Lal Naik (Expert)
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20 March 2009 In a recent case, the apex court has held that Section 194C is not applicable to payment made to Hotels.

However, applicability of Section 194I can not be ruled out.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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20 March 2009 Section 194I will be applicable for Room rent if the amount exceeds Rs. 120,000 in a year.

For payment made against foods etc. Section 194C will be applicable.

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Shyam Lal Naik

Shyam Lal Naik (Expert)
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20 March 2009 Please refer to the following link as well.

https://www.caclubindia.com/forum/messages/2009/3/27914_customer_need_not_deduct_tax_while_paying_for_hotel_services.asp?quote=156785&

Ram Das Garg

Ram Das Garg (Querist)
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21 March 2009 PLS PROVIDE ME THE EXACT REFERENCE OF THE CASE LAW. AND THANKS FOR DOING ME FAVOUR.

RAM DAS GARG