Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Tds on food bill

Shiv Jindal (Accounts Officer) (46 Points)

19 June 2012

Hi,

I want to know the applicability of TDS for food bill from Hotel Inds. If TDS is applicable kindly confirm the rate of TDS

Shiv Jindal

Reply
Follow
Share

11 Replies

Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 19 June 2012

As per section 194C the term work includes 'Catering'. As the amount is being paid towards food bill from hotel ind, TDS @ 2% needs to be made as follows:

if single bill exceeds Rs 30K or

if aggregrate payments exceeds Rs 75k during the F.Y..

Upgrade to CAclubindia Pro. Subscribe Now!

YOGESH (STUDENT) (128 Points)
Replied 19 June 2012

In case of deductee is Individual & HUF it is 1%, but for others its 2% for the above mentioned threshold limit exceeds.

In case of No PAN or Invalid PAN the TDS to be deducted is 20%

Tanvi (Practising CA) (223 Points)
Replied 20 June 2012

Originally posted by : Giridhar S Karandikar

As per section 194C the term work includes 'Catering'. As the amount is being paid towards food bill from hotel ind, TDS @ 2% needs to be made as follows:

if single bill exceeds Rs 30K or

if aggregrate payments exceeds Rs 75k during the F.Y..

In case of deductee is Individual & HUF it is 1%, but for others its 2% for the above mentioned threshold limit exceeds.

In case of No PAN or Invalid PAN the TDS to be deducted is 20%

(Guest)

Originally posted by : tanvi
	Originally posted by : Giridhar S Karandikar As per section 194C the term work includes 'Catering'. As the amount is being paid towards food bill from hotel ind, TDS @ 2% needs to be made as follows: if single bill exceeds Rs 30K or if aggregrate payments exceeds Rs 75k during the F.Y.. In case of deductee is Individual & HUF it is 1%, but for others its 2% for the above mentioned threshold limit exceeds. In case of No PAN or Invalid PAN the TDS to be deducted is 20%

I slightly differ from the explaination or solutions given, if the trasaction is of personal nature not TDS will be required to be deducted.

If bill of food is having descripttion of service provided and that service including service tax exceeds Rs. 30,000/- in single time or Rs. 75,000/- annually, then and then only TDS will be applicable in this case as per the above quoted Rates.

CA PRAVEEN SINGH (MANAGER ACCOUNTS) (2277 Points)
Replied 20 June 2012

YES.YES APPLICABLE

TDS IS TO BE DEDUCTED U/S 194C.

CHECK YOUR BILL AMOUNT..SINGLE EXCEEDING Rs 30000..

ANNUALLY OF RS 75000...

RATE IS 2% OR 1% DEPEND UPAN THE DEDUTEE

Upgrade to CAclubindia Pro. Subscribe Now!

Nitin (Exicutive) (21 Points)
Replied 20 November 2013

Dear Sir/Madam, We can get a clear picture while go through the below Judgement by the Bombay High court in the case of East India Hotels‐vs‐CBDT 320 ITR 526 (Bom): The issue before the court was whether services provided by a hotelier would fall within the scope of the said expression. The court answered in negative by observing as under: “The expression “carrying out any work” in section 194C is limited to any work which on being carried out culminates in to a product result. In other words, the word “work” in section 194C is limited to doing something with a view to achieve the task undertaken or to carry out an operation which produces some result.” “The services rendered by a hotel to its customers by making available certain facilities/amenities like providing multilingual staff , 24 hour service for reception, telephones, select restaurants, bank counter, beauty saloon, barbar shop, car rental, shopping centre, laundry, health club, business centre services etc do not involve carrying out any work which results into production of the desired object and therefore, would be outside the purview of section 194C of the Act.” Hence my understanding is that there is no requirement to deduct the TDS on Restaurant and other services rendered by Hotel other than rent .

Vasanth Kumar M R (Audit Assistant) (21 Points)
Replied 16 December 2015

Hi,

Please confirm me that, TDS is applicable on payment made to Hotel towards Food and place (Event /Seminar).

ATANU BANERJEE (Accounts Executive) (75 Points)
Replied 02 February 2016

Hi,

I am going to payment to an Individual for catering services provided in our annual office picnic.My question is should I dedect TDS whicle making a onetime payment of Rs.61570.00 or I just pay the amount 61570.00 excluding TDS amount.

Please let me know wheather I deduct TDS or not.

I am waiting for your advice.

Thanks

Atanu Banerjee

birupakhya sahu (B.Com) (1 Points)
Replied 15 February 2016

may i want to know can i deduct tds against expenses bill or not?

Mukesh (9) (22 Points)
Replied 18 January 2017

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.