Is tds applicable for hotel bill (banquet) for 1 day meet

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Guest

Guest (Querist)

08 February 2014 My query is that if a group of people meet for a seminar for 1 day in Banquet (hotel) and bill consists of food provided on which vat is included and total bill is inclusive of service tax then tds is applicable and if yes under which head?? Also bill is more than Rs. 2 lakh Please explain?

Nischit Sanghavi

Nischit Sanghavi (Expert)
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10 February 2014 Not covered in Chapter XVII of Income Tax Act, 1961. Need not to deduct TDS.

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Guest

Guest (Querist)

11 February 2014 But some have opinion that tds on contractor can be applicable in said case. Please explain how no tds is applicable

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Asha Kanta Sharma online

Asha Kanta Sharma

(Expert)
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01 August 2024 In the context of a seminar or meeting held at a hotel banquet where the bill includes charges for food and service, the applicability of TDS (Tax Deducted at Source) depends on the nature of the services provided and the tax laws in force. Here's a breakdown of the situation:

### TDS Applicability on Hotel Bills for Banquets

1. **Nature of Charges**:
- **Hotel Charges for Banquet**: When a hotel provides a banquet facility including food, the charges are typically for services related to the venue and catering. This may include service charges, food and beverage costs, and other related services.

2. **Service Tax and VAT**:
- **Service Tax**: Service tax is applicable on services provided by the hotel, including catering and venue services.
- **VAT**: VAT (or GST, if applicable) is charged on the goods supplied (like food) as per state laws or GST laws.

3. **TDS Applicability**:
- **Section 194C (Contractor)**: TDS under Section 194C is applicable on payments to contractors for work, including construction and services. However, this typically applies to payments for contracts for work and not for payments for goods or services like hotel bookings where the service is not contracted but purchased.

- **Section 194I (Rent)**: If the payment to the hotel is considered rent for the use of the banquet hall, it may fall under Section 194I. However, this section generally applies to payments for rent of immovable property and not for service-related expenses.

- **Section 194J (Professional Fees)**: This section applies to professional and technical services. It is less likely to be applicable in the context of hotel charges for a banquet.

### Applicability for a One-Day Seminar

- **If TDS is Required**: In general, TDS is not applicable for payments for hotel services such as banquet facilities and catering, as these are typically considered as part of the purchase of services rather than a contract for work.

- **However**: If the expenditure falls under the category of a contract for work or if the hotel is providing a service that resembles a contract (e.g., if the arrangement involves specific terms akin to a contractor arrangement), TDS might be applicable under Section 194C. This would be more of an exception rather than the rule.

### Summary:

- **General Case**: For a one-day seminar at a hotel with charges for food and banquet services, TDS is generally not applicable. The charges are for the service provided by the hotel and not a contractual service as per the typical application of TDS provisions.

- **Check Specific Terms**: Review the terms of the contract or arrangement with the hotel. If there is a specific contract for services or a unique arrangement that aligns more closely with a contractor arrangement, consult with a tax professional to confirm the applicability of TDS.

**Consult a Tax Advisor**: For precise advice and to ensure compliance with current regulations, it is advisable to consult a tax advisor or professional who can review the specific details of the arrangement and provide guidance based on the latest laws and interpretations.