India’s Supreme Court on 14 November 2022 issued a ruling that the arrangement between the taxpayer (an airline) and air travel agents was that of principal and agent. The supplementary commission (i.e., the amount over and above the net fare quoted by the airline) earned by the travel agents from selling flight tickets to customers qualified as commission under section 194H of the Income-tax Act, 1961 (ITA), requiring the airline to withhold tax deducted at source (TDS) from the payments. The taxpayer’s appeal was one of a batch of appeals involving airlines.
Source Deloitte
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