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 11 months 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
1680 Answers
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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
598 Answers
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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
1874 Answers
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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
1680 Answers
5.0 on 5.0
  Talk to Rohit R Sharma

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