Tax on travel agent services

I run a travel company where we act as intermediaries between corporate clients and hotels. We take a tax inclusive rate from hotels add a slight mark up and pass on to the clientWe pay the hotel in advance and collect payments later 

Obn of our corporate clients has made payment after a 10 percent TDS deduction on the total bill (Not just the markup value)

My questions are

1 Is that required

2 My markup is less than 10 percent so it is a loss. I thought we needed to pay a1.5 percent GST
Asked 13 days ago in Service Tax from Bangalore, Karnataka
Hello Sir,

Firstly on what basis did your client deduct 10%, they were correct in deducting it on the whole amount but they should deduct it as a contractor and rate should have been 1 or 2% and not 10%. 

So they are correct in deducting TDS, but you have to discuss the rate with them. 

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
706 Answers
5.0 on 5.0
  Talk to Rohit R Sharma
Dear sir,

with respect to your quarries please note below :

a) If you are only providing tickets and hotels service than TDS shall be deducted but at the rate of 2% only.

b) The TDS need to be deducted on total value. however if you are fine with showing mark up to corporate you can alternatively also raise two invoice once for reimbursement of ticket or hotel cost and another for your markup fees whereby TDS shall only be deducted on your markup fees
Vishrut Rajesh Shah
CA, Ahmedabad
220 Answers
4.9 on 5.0
  Talk to Vishrut Rajesh Shah
Dear Sir,

Yes, your client will deduct TDS on the whole amount but he rate of TDS should be 1%/2% and not 10%

Please feel free to call/revert in case of any doubts

Thanks and Regards
Abhishek Dugar
CA CS B.Com
Abhishek Dugar
CA, Mumbai
755 Answers
5.0 on 5.0
  Talk to Abhishek Dugar
Hello Sir,

What exactly are you doing here, are you giving places on rent or just assisting them get places for you. If its assisting and its a Contract, then 1-2%, if you give them a room on rent by taking it on rent from some other place then rent @ 10%.

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
706 Answers
5.0 on 5.0
  Talk to Rohit R Sharma

Ask a Question

Get tax advice from top-rated chartered accountants. It's quick, easy, and anonymous!
Ask a question

Other Questions

Chartered Accountants

Abhishek Dugar
CA, Mumbai
755 Answers
5.0 on 5.0
Rohit R Sharma
CA, Mumbai
706 Answers
5.0 on 5.0
Vishakha Agarwal
CA, Bangalore
208 Answers
5.0 on 5.0
Shiv Kumar Agarwal
CA, Delhi
195 Answers
5.0 on 5.0
Lalit Bansal
CA, New Delhi
69 Answers
5.0 on 5.0
Vishrut Rajesh Shah
CA, Ahmedabad
220 Answers
4.9 on 5.0
Ria Nagpal
CA, Ahmedabad
28 Answers
5.0 on 5.0
Anuj Agarwal
CA, Aligarh
34 Answers
4.6 on 5.0
B S Sridhar
CA, Chennai
35 Answers
5.0 on 5.0
Rajeev P T
CA, Chennai
34 Answers
5.0 on 5.0