Commission from Online Hotel booking, Service Tax

[rashid mundeth]

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.

Posts / Replies

[Pradeep Khatri]

Dear Rashid,

Since the inception of Negative List regime, Classification of Taxable Services do not have any relevance. However, for admin perspective the Revenue Department had come with 120 heads for classification with their accounting code.

According to us you may fall in following three categories, namely:-

1. Business Auxiliary Services;
2. Business Support Services;
3. Service other than 119 Services.

Rate of tax would be @ 12.36%. ( 12% +2%+1%).

Regards,

Team YAGAY and SUN

(Management and Indirect Tax Consultants)