TAAI, TAFI To Discuss TDS Issue With IATA Commissioner

Jyoti Koul - New Delhi

Of late, business relations between travel agents and the airline fraternity has been far from cordial. This could be attributed to the current dispute over the long pending TDS (tax deduction at source) issue, wherein a number of airlines like Delta, Singapore, Thai, British Airways and Lufthansa have been pressurising agents for no fault of theirs.

The problem dates back to the year 2001, when the government announced the inclusion of tax deduction at source (TDS) on ticketing commissions requiring airlines to do the necessary calculations for the amount of TDS that they needed to deduct from each individual agent. Currently, airlines have been demanding TDS for the year April 2001 to March 2002, which agents are refraining from paying as they have already filed their returns for the said year.

"The tax that was due to agents has already been paid and they can not pay it the second time," said an industry expert.

Unable to find an amicable solution, travel agents are now involving IATA to resolve the issue. Major travel associations like Travel Agents Association of India (TAAI) and Travel Agents Federation India (TAFI) have taken up the issue with IATA and have already set up a meeting slated for April 15, 2004, with the commissioner to settle the dispute.

According to Balbir Mayal, president, TAAI, "There are certain airlines that have moved to tribunals for the grant of the tax. But the final decision of the tribunal is still pending. And as an association, we suggest that the airlines wait as long the tribunal demands."

Elaborating further, Mayal said that the actual dispute is between the seven per cent legal IATA commission and incentive, which is over and above seven per cent. Adds Praveen Chugh, president, TAFI, "TDS should have been applicable on the commission and not on discounts offered by agents. TAFI along with TAAI is taking up the matter with the IATA commissioner and we are only hoping that the issue is resolved with some mutually favourable solution."