Sir,We are providing additional online booking services to hotels and acting as their agent for hotel booking sites. Our commission is the difference of commission collected from the hotels and paying to the hotel booking sites (ex:commission collected from a hotel for one booking is ₹ 200 and paid to hotel booking sites is ₹ 180, hence our net commission is ₹ 20).
Our clients are the hotels and please advice me on the service tax head and tax rates to be shown on the commission invoice.
Service Tax on Online Booking Commissions: Possible Classification Under Business Auxiliary or Support Services, Tax Rate at 12.36%. An individual inquired about the appropriate service tax classification and rates for commissions earned from providing online booking services to hotels. The commission is the difference between what is collected from hotels and paid to booking sites. A consultant replied, stating that under the Negative List regime, classification is less relevant, but for administrative purposes, the service might fall under Business Auxiliary Services, Business Support Services, or other services. The applicable tax rate is 12.36%. (AI Summary)
TaxTMI 
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TaxTMI 
