TDS relating to Tour Operating Services

[gururaj Bhat]

Dear Sir,

Presently i am handling a client who is into tour operating business. I have some query relating to TDS applicability. Can you please advise.

Scenario 1:

ABC Pvt Ltd is engaged in providing Tour Operating Services located in India

Mr D customer of ABC Pvt Ltd approaches for a package tour to Italy.

Tour Package includes Flight, Cruise, Hotel, Visa etc.

ABC Pvt Ltd approaches below vendors for:

EFG Pvt Ltd is providing Air Ticket Booking Services located in India (Pays them 70k for ticket + 5k for handling charges)

LMN Pvt Ltd is providing Visa Services located in India (pays them 30k for visa + 5k for handling charges)

XYZ is a destination tour management company located in Italy and has no Indian PAN, Cruise Booking & Hotel booking is done by XYZ (pays them 60k through forex)

Should i make payment u/s 195 for XYZ

Whether TDS is applicable on the above transaction? If yes for which value TDS need to be deducted and under which section TDS need to deducted?

Scenario 2:

ABC Pvt Ltd is engaged in providing Tour Operating Services located in India

Mr D customer of ABC Pvt Ltd approaches for a package tour to Italy.

Tour Package includes Flight, Cruise, Hotel, Visa etc.

ABC Pvt Ltd approaches below vendors for:

EFG Pvt Ltd is providing Air Ticket Booking Services located in India (pays them 70k for ticket + 5k for handling charges)

LMN Pvt Ltd is providing Visa Services located in India (pays them 30k for visa + 5k for handling charges)

PQR Pvt Ltd is providing Cruise Booking Service located in India (pays them 30k for cruise bookings) who is acting as a booking agent only

STU Pvt Ltd is providing Hotel Booking Service located in India (pays them 30k for cruise bookings) who is acting as a booking agent only

Whether TDS is applicable on the above transaction? If yes for which value TDS need to be deducted and under which section TDS need to deducted?

Thanking you,

AI Summary

Does TDS Under Section 195 Apply to Indian Tour Operator's Payments to Italian Cruise and Hotel Vendor? A user handling a client in the tour operating business seeks advice on the applicability of Tax Deducted at Source (TDS) for two scenarios. In the first scenario, an Indian tour operator, ABC Pvt Ltd, engages Indian vendors for air tickets and visa services and an Italian company, XYZ, for cruise and hotel bookings. The user questions if TDS under section 195 applies to payments made to XYZ. In the second scenario, all vendors, including those for cruise and hotel bookings, are Indian. The user inquires about TDS applicability, the deductible value, and the relevant sections for both scenarios.