Case Law Details
Singapore Airlines Ltd. Vs CIT (Supreme Court)
Whether an airline is responsible for deducting tax at source in respect of supplementary commission which an agent is paid on the difference between the actual fare and the net fare- Section 194H of Income-tax Act, 1961 analyses including whether liability to deduct when the tax can be fastened when admittedly the deducted has discharged the tax liability.
The Supreme Court in this case was dealing with a case where the department saddled the airline with liability to deduct tax at source in respect of the amount which was over and above the actual fare which was charged to the consumer by the agent and the net fare which was the fare set by the airline for the travel agent.
The airline was already deducting tax on the commission paid on the net fare. What was disputed by the airline was the commission that was kept by the travel agent when he sold the ticket at a higher price over and above the net fare.
It was argued that there was no liability to deduct tax on such difference since this portion of the payment was from the consumer to the agent and not from airline to the agent.
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