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Buffet lunch

15 February 2024

company organized a buffet lunch with work shop for his sales team members in 5 star hotel. A hotel raised his invoice as below.
Buffet lunch 200000
projector 10000
cord less mike 3000
pointer 2000
sub total 215000
Gst 10000
Grand total 225000

My question is can tds applicable, if yes , then which sec.

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13 Replies

RAJA P M ("Do the Right Thing...!!!") (127962 Points)
Replied 15 February 2024

TDS not applicable for food and beverage...
All other is not exceeds the limit...

(It's my view)

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CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 15 February 2024

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.

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Rajkumar Gutti (538 Points)
Replied 16 February 2024

Dear All ,
But there is work shop held with dinner , hence hotel hall premises used , projector etc used. Hall rent includes in buffet lunch. Hence what is the tds scenario.

RAJA P M ("Do the Right Thing...!!!") (127962 Points)
Replied 16 February 2024

You asked(&think) the query like want to deduct TDS.

If you want/will deduct TDS then deduct u/s 194I ...

CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 16 February 2024

Then you have to deduct TDS u/s 194I as the amount is more than Rs 180000/-

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Rajkumar Gutti (538 Points)
Replied 16 February 2024

Dear All,
Not to make misunderstanding .I take inference that buffet lunch and work shop conducted.Hence obviously hall premises used .It is implied that hall charges included in buffet lunch

RAJA P M ("Do the Right Thing...!!!") (127962 Points)
Replied 16 February 2024

Dear Rajkumar,

Please understand the hall charges, electricity charges, Service man charges, Vessels charges and all other charges which serving the food is included in the Buffet... Right...??

(Not to make misunderstanding...)

We don't take it with misunderstanding. You just think we take that charges only for buffet food...

Our replies As per Your said billing value...

ask the details from the hotelier and Consult with Your Auditor...

CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 16 February 2024

As you have availed services of hotel for buffet lunch and along with it some petty facility was also provided by the hotel(projector, Mike,pointer) then the whole services are considered as contract. & TDS u/s 194C will be only applicable on whole amount of Rs.2,25,000.