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TDS Deduction on Travel Agent Invoice

Vipul Acharya (Account Officer) (647 Points)

01 October 2019

whether TDS to be deducted on Travel Agent Service Charges for Air -Ticket Bookings

if yes, is it under 194C or what

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13 Replies

Charan Kumar (15 Points)
Replied 01 October 2019

According to my opinion, we should not deduct TDS 194 as he is not an pure agent who is acting behalf on us. If at all he is pure agent, we need to deduct TDS under section 194H

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sabyasachi mukherjee (27597 Points)
Replied 02 October 2019

TRAVEL AGENT IS WITHIN THE PURVIEW OF GST Act.

Kapadia Pravin (17259 Points)
Replied 02 October 2019

But what about query reply ? ??
Querist are more interested in reply rather GK

sabyasachi mukherjee (27597 Points)
Replied 02 October 2019

I hope vipul hv understood.
if he has not understood heis not impatient.
@ vipul tds is not to be deducted.

Suresh Thiyagarajan (Student) (3986 Points)
Replied 02 October 2019

1. This all depends on the nature of the contract between Air travel agency and the Airline company.
2. If you look at the contract, the agency will sell the tickets only on behalf of the airline company. They do not buy the ticket as such. In other words, the risk of not selling the tickets still lies with the airline company. Travel agency merely acts as an agent where they make advertisements and facilitate with the customers in selling the tickets.
3. For the above service, the agency will charge a fee based on the number of tickets sold and the amount collected from customers.
4. So, even though all the above business comes under the contract, the nature of income for the agency is commission. Hence, TDS needs to be deducted u/s 194H @ 5% if the amount paid during the year exceeds Rs. 15,000.
Please correct me if the above solution has an alternative view.

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Vipul Acharya (Account Officer) (647 Points)
Replied 02 October 2019

As per our auditor it is deductible u/s 194C

Suresh Thiyagarajan (Student) (3986 Points)
Replied 02 October 2019

1. Better consult the travel agency and inquire how people normally deduct TDS for the payment.
2. Sec 194C is also possible since your payment is only in relation to the ticket, which is revenue for airline companies. And it falls under the category of the contract between you and the airline company and whatever the amount you are paying is revenue which requires TDS u/s 194C.
3. With limited information, I have given you the above reply. Better to go with the auditor's view.
Please correct me if the above solution has an alternative view.

Vipul Acharya (Account Officer) (647 Points)
Replied 02 October 2019

But if we read Service Contract as per sec 194c it does not covers airline tickets.

And we merely booked tickets with support of travel agent and there is no contract with airlines

kindly suggest

Suresh Thiyagarajan (Student) (3986 Points)
Replied 02 October 2019

1. There will not be any specifications regarding TDS in the service contract. Whatever the amount you are paying is only to the airline company.
2. Airline companies will pay commission income to Air travel agency after the sale of tickets. It is their responsibility to deduct TDS u/s 194H when making the payments to the air travel agency.
3. In other words, agency is doing its job of collecting money from you and remitting the same to the airline company after deducting a commission. This is how a normal agency and airline business works. There could be some other agreements to between airline companies and agency companies.
4. Based on the limited information, TDS 194C only needs to be deducted on buying the tickets from the agency.
Please correct me if the above solution has an alternative view.

sabyasachi mukherjee (27597 Points)
Replied 02 October 2019

194 H
I ADMIT BUT NOT 194 C.

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Originally posted by : Vipul Acharya
	whether TDS to be deducted on Travel Agent Service Charges for Air -Ticket Bookingsif yes, is it under 194C or what