Accounting for Preferred Vendor Commissions: Legitimate Invoicing & GST Treatment (2026)

Legally structuring vendor referral fees under Indian tax laws:

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   Input Tax Credit (ITC) for the Vendor: The registered vendor pays the 18% GST and claims 100% Input Tax Credit in their GSTR-3B against their outward client billing.

The calculation below illustrates a compliant B2B commission invoice issued by a venue to a preferred decorator under the updated 2% Section 194-H TDS rate:

• Total Decorator Contract Billed to Wedding Client: ₹3,50,000.00
• Agreed Preferred Vendor Commission Rate (12.0%): ₹42,000.00 (Taxable Value)
• Central GST (CGST @ 9.0%): ₹3,780.00
• State GST (SGST @ 9.0%): ₹3,780.00
• Gross Commission Invoice Total: ₹49,560.00
• Less TDS Deducted by Decorator under Section 194-H (2.0% on ₹42,000 Taxable): -₹840.00
• Net Commission Payable by Decorator to Venue: ₹48,720.00

The table below outlines common vendor commission models across Indian banquet venues:

Venura streamlines preferred vendor accounting:

• Automated Commission Invoice Generator: Computes exact commission percentages from contracted vendor values and generates compliant 18% GST invoices in 1 tap.
• Vendor Settlement Ledger: Reconciles client advances against vendor payouts and commission debits in real time.
• One-Click Tally Prime Sync: Exports commission sales journals and Form 16A TDS ledgers directly into Tally Prime.

Monetizing outside decorators chosen by clients:

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   Fixed Outside Decorator Royalty Fee (₹25,000 – ₹50,000): Billed to outside production crews to cover electrical power infrastructure, rigging access, and cleanup overhead.

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   B2B Tax Invoicing under SAC 998397: The venue issues a formal 18% GST tax invoice for the royalty fee, allowing the outside decorator to claim 100% ITC.

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   Venura Automated Invoicing: Generates decorator royalty bills and tracks deposit holdbacks on mobile.

Ensuring audit-proof tax compliance:

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   Table 4A Reconciliation: Declare all B2B vendor commission turnover in Table 4A of GSTR-9, matching outward tax liability with Table 3.1(a) of GSTR-3B.

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   Tally Prime XML Export: Venura exports dedicated commission sales ledgers, ensuring 100% reconciliation between financial books and GSTN portal records.

Ensuring corporate statutory compliance across all preferred vendors:

• Vendor Master File Review: Verify active 15-digit GSTINs, MSME Udyam registration certificates, and PAN details for all regular suppliers.
• Quarterly Form 16A TDS Reconciliation: Reconcile 2.0% Section 194-H TDS deductions against central TRACES portal ledgers, preventing tax filing penalties.

Streamlining event agency financial accounting:

• Automated Commission Journals: Export vendor commission bills, TDS ledgers, and CGST/SGST splits directly into Tally Prime XML ledgers in under 60 seconds, eliminating manual data entry.