Is TDS u/s 194H applicable for payments to agent?
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
10 February 2010
A firm gets tickets booked for its employees through a travel agent. The travel agent charges an amount on each ticket booked as "service fee", which in its agreement is referred to as a "management fee". It charges Service Tax on this amount.
Can the amount appearing in the bill as "service fee" be regarded as commission for the purposes of Section 194H, and TDS be deducted accordingly?
PS:
1) I am asking this from the customer point of view, and not airline's.
2) I am asking if TDS is deductible u/s 194H and not 194C, since the Board's view on 194C is very clear.
3) Please provide the source(s) you are referring, if possible.
Can the amount appearing in the bill as "service fee" be regarded as commission for the purposes of Section 194H, and TDS be deducted accordingly?
PS:
1) I am asking this from the customer point of view, and not airline's.
2) I am asking if TDS is deductible u/s 194H and not 194C, since the Board's view on 194C is very clear.
3) Please provide the source(s) you are referring, if possible.
10 February 2010
The Explanation to section 194H defines commission or brokerage includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person
- for services rendered (not being professional services) or
- for any services in the course of buying or selling of goods or
- in relation to any transaction relating to any asset, valuable article or thing, not being securities;
Hence, in order to fall in the above definition there must be a element of agency in all services or transactions.
In my view, section 194H may not be applicable.
- for services rendered (not being professional services) or
- for any services in the course of buying or selling of goods or
- in relation to any transaction relating to any asset, valuable article or thing, not being securities;
Hence, in order to fall in the above definition there must be a element of agency in all services or transactions.
In my view, section 194H may not be applicable.
Querist : Anonymous
Querist :
Anonymous
(Querist)
10 February 2010
Thanks for your reply, Chitresh.
But, since the party is booking the tickets on behalf of the firm, shouldn't the party be taken as an agent?
But, since the party is booking the tickets on behalf of the firm, shouldn't the party be taken as an agent?
10 February 2010
I feel the transaction is on principal to principal basis. We are just buying the tickets from them and paying their charges for the same. They are acting as agent for the airline.
No doubt there is some confusion and some other view is also possible.
No doubt there is some confusion and some other view is also possible.
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