India compliance
What is TCS on OTA bookings?
TCS on OTA bookings is tax collected at source under Section 52 of India's GST law. When an online travel agency collects payment from the guest on the hotel's behalf, it deducts a small percentage of the booking value, pays it to the government and reports it against the hotel's GSTIN.
How it works
The OTA deducts TCS from the amount it pays out to the hotel and files it in its own return. The amount then appears in the hotel's GST account, and the hotel claims it as a credit when filing. The rate is set by the government and has changed over time, so check the current rate with your accountant.
What hotels need to do
Reconcile the TCS each OTA reports with your own records of bookings and payouts every month. To do that you need to know which bookings came from which OTA and what each was worth. Unclaimed TCS is money left with the government.
In StaySynq
StaySynq keeps the OTA source on every booking and includes an OTA TCS estimate in the GST filing pack, to reconcile against what each OTA reports.
Common questions
Does TCS apply to pay-at-hotel bookings?
TCS applies where the OTA collects the payment. Where the guest pays the hotel directly, the OTA has not collected the consideration; confirm the treatment for your contracts with your accountant.
Related terms
- SAC codes for hotelsSAC (Services Accounting Code) is the code that classifies a service on a GST invoice in India. Hotels commonly use 996311 for room accommodation, codes in the 99633 group for restaurant and food service, and 996334 for catering at events and banquet halls.
- City ledgerA city ledger is the hotel's record of money owed by parties who are not currently staying: companies with credit accounts, travel agents, OTAs and guests who left with an unpaid balance. It is the hotel's accounts receivable for stays that were billed rather than paid at check-out.
- Channel managerA channel manager is software that connects a hotel to its online travel agencies (OTAs). It sends the hotel's rates and availability to every channel at once and passes bookings, changes and cancellations back, so the same room is not sold twice.
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