Airlines collecting net fare against published fare from travel agents is commission in substance - liable to TDS
IF one is looking for a good example of victory of substance and nature of transactions over forms or machinery, here is a landmark decision from the Delhi High Court which has gone in favour of the Revenue and against scores of Airlines. The issue is related to TDS on supplementary commission u/s 194H . The HC has held that the supplementary commission which is the amount retained by the travel agent is commission within the meaning of Section 194H read with Explanation (i) to the said section. The assessee-airlines were thus obliged to deduct tax at source at the rate prescribed during the relevant period. The assessee-airline having not deducted the tax at source, they are liable to be held, within the terms of Section 201(1), as assessee(s)-in-default and also liable for payment of interest in terms of section 201(1A) of the Act.
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