Tds on payment to hotel

Page no : 2

Nitin sharma (jobs) (121 Points)
Replied 30 October 2015

Jb contract hi nhi diya h toh tds applicable kaise hoga

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Vishal Aggarwal (Working at Lalit Purushottam Dass & Co.) (38 Points)
Replied 30 October 2015

TDS not applicable acc to me because company have not any contract with the hotel......

satyamawasthi33@nokiamail.com (Auditor) (21 Points)
Replied 30 October 2015

No tds deduction nor in section 194i, due to hotel are not covered in house property and nor in section 194c.

muniraj (Associate Manager) (27 Points)
Replied 30 October 2015

TDs not applicable on de above case

sumit kumar (Ca Final) (174 Points)
Replied 30 October 2015

Circular : No. 5/2002, dated 30-7-2002. If there is no obligation on the hotel to provide any rooms then no need to deduct TDS.

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Rajesh Kumar Gupta (Senior Divisional Manager) (714 Points)
Replied 30 October 2015

TDS applicable if hotel accommodation is meant for employees as rent free accommodation provided yearly outgo exceeds 1.8 lacs pa to a single hotel.

Miss Rinkal (Student) (1309 Points)
Replied 30 October 2015

Please refer the order. Hope this may prove to be useful to you.

Accordingly, tds would not be applicable in the given case as the case is similar to the order attached here

Attached File : 131263 20151030182204 non applicability of tds in case of hotel accomodation.pdf downloaded: 220 times

hareesha g (ca practice ) (32 Points)
Replied 30 October 2015

If client also paid rent of rs 180000 and exced than TDS also applicable u/s 194i(b)

hareesha g (ca practice ) (32 Points)
Replied 30 October 2015

If client also paid rent of rs 180000 and exced than TDS also applicable u/s 194i(b)

Karthik.V.Kulkarni (Chartered Accountant) (594 Points)
Replied 30 October 2015

I would like to reiterate that tds needs to be deducted for hiring rooms u/s 194 i and 194 c is not applicable. Kindly go through hero motorcorp ltd case law where hiring of hotel room is required for tds u/s 194 i. Kindly urge all my fellow friends to go through the case law.

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Miss Rinkal (Student) (1309 Points)
Replied 30 October 2015

I would like to bring to the notice of the experts. There is one judgement passed by Delhi bench of ITAT, case of Hero Moto Corp Ltd vs CIT (2013) 60 SOT 25 passing an opinion that tds should be deducted u/s 194I in respect of rent and 194C in respect of catering services whereas Bangalore bench of ITAT, case of M/s Ratnagiri Impex Pvt Ltd vs DCIT (2014) passing an opinion that tds would not be required to be deducted

Based on the above two cases, which judgement needs to be followed is just not. Will jurisdiction rule applies where there is different opinion given by 2 ITAT.

HOWEVER in case of East India Hotels vs. CBDT in CWP No.2 104 of 1994, Bombay HC held that 194C will not be applicable

Don't know what to follow and what not to follow

Please find attached Hero Moto Corp case law.

Awaiting for definite and absolute reply

Attached File : 131263 20151030222308 530058448445257725113 5 1refnohero motocop final.pdf downloaded: 264 times

Karthik.V.Kulkarni (Chartered Accountant) (594 Points)
Replied 31 October 2015

Hi rinkal, the case law is regarding deduction of tds under 194 c where the person had not availed event management services, so as per that judgement tds 194 c is not deductible. Even in hero motor corp caselaw 194c need not be deducted for hiring room on rent. But the east india case law is based on event management expenses and same is differciated based on fact. The mere fact that 194 i is not mentioned in east india hotels cannot be concluded that no tds is deductible. The same was not mentioned because the grounds of appeal was only about event management. Where as in hero motor corp both hiring and catering as seperate things were made grounds of appeal thus verdict was issued on the same. So by conclusion i can summaries that where there is event management 194c is applicable as per east india hotels case law where as hiring of rooms on rent is concerened i would go to specific case law of hero motor corp. East india hotel case law is distingushable by facts.

Karthik.V.Kulkarni (Chartered Accountant) (594 Points)
Replied 31 October 2015

It is true and based on facts to be decided whether tds is applicable or not. If the payment to hotel is 200000 for 10 to 15 days stay same would not be liable for tds but where 20 delegates or even 5 delegates stay for a period of 15 days or one delegate for a montg it would take character of rent and more so when within a year the same hotel is booked for different delegates and amount is enormous this would only strengthen the case. Thus there are two ways of seeing it. One casually going and staying in hotel and one booking certain rooms for a period. The later would be liable to tds.