Freelance consultants selling under your brand: the terms

A freelance travel consultant selling under your brand brings a client from their own circle, say a Bali couple, on a verbal "50-50" or "10 percent." The fight starts the day you discount, a trip cancels, or the consultant leaves with your best client.

A consultant on your invoice is not a sub-agent: your agency carries the GST, TCS and consumer-court exposure for what they promise, so the split belongs on margin, paid after travel. This post works three models on one file, sets the payout and clawback rules, covers TDS, GST and labour codes for 2026-27, and ends with a copy-paste terms sheet.

A consultant on your invoice is not a sub-agent

A sub-agent buys at a net rate and resells under their own name and GST number. A consultant does neither: your agency raises the quote, invoice and GST, and takes the money (building a sub-agent network covers that model).

Letting someone act in your name is the kind of "conduct" that can make their promises yours: in its 2023 Kuwait Airways judgment, a consumer appeal, the Supreme Court cited Contract Act section 237 and held an airline bound by its agent's delivery promise. TCS follows the same logic: whoever sells the package collects it, your agency, not the consultant (TCS on overseas packages). Never let a consultant invoice, collect TCS, or take payment into a personal account.

Split the margin, not the sale

Commission on the sale price makes your agency fund every discount a consultant gives to close. Commission on gross margin (invoice value excluding GST/TCS, minus supplier costs) exposes both sides to that discount.

Say a consultant brings a couple for a 6-night Bali package. Invoice ₹2,20,000 before GST/TCS; costs total ₹1,75,000; margin ₹45,000.

Model	Basis	Consultant gets	Agency keeps
A: 10% of sale	% of invoice value	₹22,000	₹23,000
B: 50% of margin	% of gross margin	₹22,500	₹22,500
C: tiered on margin	40% to ₹30,000, 60% above	₹21,000	₹24,000

Example: A ₹15,000 discount drops the package to ₹2,05,000, margin to ₹30,000. Model A: the consultant earns ₹20,500, the agency keeps just ₹9,500 (down from ₹23,000). Model B: both sides get ₹15,000. Model C: consultant ₹12,000, agency ₹18,000, rewarding whoever protects margin.

When commission is earned: full payment and travel done

Define commission as earned only once the client has paid in full and travel is over, then pay against a monthly statement. Anything paid earlier is an advance you may have to claw back.

Careful: If your consultant is Udyam-registered as a micro or small enterprise, MSMED Act section 15 caps any agreed payment period at 45 days from the day the service is accepted, with compound interest at three times the RBI bank rate if missed (section 16). Whether a commission service counts as accepted at booking or at travel isn't settled; put your own trigger in writing and get it confirmed.

Cancellations and changes: the clawback rule

Commission on a cancelled file is the same share of what your agency keeps after supplier penalties. It is never a share of what the client paid.

Example: The couple cancels 25 days out. Your terms retain ₹1,10,000; supplier penalties total ₹83,000. Retained margin: ₹27,000 (before any tax your CA says applies). Model B commission: ₹13,500. Pay only after travel and there's nothing to adjust; pay at booking instead, and you need ₹9,000 back.

TDS on consultant commission in 2026-27

Whether your agency must deduct TDS depends first on its legal form and size, then on the year's total and the consultant's PAN. Figures are current as of October 2026; confirm with your CA.

From 1 April 2026, commission sits under section 393(1), Sl. 1(ii), Income-tax Act 2025: 2% on the whole amount once a consultant's commission crosses ₹20,000 in the tax year, only if your agency is a "specified person": a company, LLP, partnership, or a proprietorship over ₹1 crore turnover (₹50 lakh, profession) last year. Smaller proprietors need not deduct here; Sl. 6(ii) bites only past ₹50 lakh to one consultant, also at 2%. No PAN: 20%, under section 397(2). The rest of the old-to-new map is in the new section numbers.

Who deducts	Rate	Threshold
Company/LLP/firm, or proprietor over ₹1 crore turnover	2%	Over ₹20,000/year, then on the whole amount
Smaller proprietor, only past ₹50 lakh to this consultant	2%	₹50 lakh/year
Any of the above, no PAN	20%	same threshold

On the ₹22,500 Model B commission: 2% is ₹450 with PAN, ₹4,500 without. Commission credited or paid up to 31 March 2026 stays under section 194H of the 1961 Act, at 2% from 1 October 2024. TDS deducted in July-September 2026 goes on the quarterly statement, reported due 31 October 2026.

GST: the consultant's invoice, not the client's

The consultant's GST registration depends on their own turnover (your commission plus anything else they bill), not the packages on your invoice. Section 22, CGST Act sets the threshold at ₹20 lakh turnover for services (₹10 lakh in some special category states); the packages stay out of it as long as the agency invoices and collects. If a consultant invoices or collects in their own name, section 24(vii) can force registration regardless of the threshold, and the full package value can count as turnover. If the consultant is in another state, confirm the position with your CA.

If registered, their invoice adds GST on the commission, usually 18% (confirm with your CA). On a 5% package, treat it as a cost unless your CA confirms input credit.

Who keeps the client when the consultant leaves

You cannot stop a client from following a consultant who leaves, and a clause barring them from dealing with "your" clients after exit is unlikely to survive a challenge. What you can protect is your data and exclusivity while they still work with you.

Section 27 of the Contract Act voids any agreement restraining lawful trade, and the Supreme Court's Percept D'Mark ruling (2006) held a restriction past a contract's term void, however reasonable it sounds. In June 2025 the Delhi HC, in Varun Tyagi v Daffodil Software, set aside an injunction under a similar post-exit clause even though it named only two clients. During the agreement, it flips: Golikari (SC, 1967, an employment case) held a covenant operating during the contract generally isn't restraint of trade, unless it is unconscionable or one-sided.

What has some court support is narrower: barring use of your records to solicit clients after exit, and even that is slow to enforce. DPDP Act section 8, whose obligations phase in over the 18 months from November 2025, makes your agency answerable for client data handled on its behalf and requires a valid contract with whoever handles it. Keep records inside the agency's own system, as an employee leaving with the client list covers for staff.

When a "freelancer" is really staff

A consultant who sets their own hours, paid only per file, is independent. One working fixed hours at your desk for a flat retainer looks like an employee, whatever the agreement calls them. The starting test courts have applied since 1956: does the agency control not just what gets done but "the manner in which he shall do his work" (Dharangadhara Chemical Works v State of Saurashtra, SC 1956).

The four labour codes, in force from 21 November 2025, define "gig worker" for the first time and require an appointment letter for every employee; see the new labour codes. Their levy sits with aggregators, not an agency paying commission.

The consultant terms sheet (copy-paste)

Put the split, payout and clawback rules, and exit terms, in one document before the next introduction becomes a booking. Fill in the brackets, have a CA check clause 8 and a lawyer check clause 11.

CONSULTANT TERMS SHEET

Between: [Agency legal name], GSTIN [GSTIN], [address]
And: [Consultant name], PAN [PAN], [address]

1. ROLE. Consultant introduces and services clients; every booking is
   quoted, invoiced and collected by the Agency, in its own name.
   Independent, not an employee.

2. OUR NAME. May call themselves "Travel consultant with [Agency],"
   using only the Agency's quotes and links; no promise outside the
   written quote.

3. CLIENT MONEY. Payments go only to the Agency's account/UPI/link,
   never to Consultant. No invoices to clients.

4. TAXES. Agency raises the GST invoice and collects TCS on overseas
   packages; neither sits inside the commission below.

5. COMMISSION. [50]% of Gross Margin per file[, or tiered: 40% of the
   first ₹30,000, 60% above]. Gross Margin = invoice value excluding
   GST/TCS, minus every supplier cost, per the costing sheet shared
   before the quote. Discounts reduce it.

6. WHEN PAID. Earned once (a) paid in full, (b) travel complete. Paid
   by the [10th] of next month against a statement. [Micro/small
   enterprise: within 45 days.]

7. CANCELLATIONS. Same share of Retained Margin (Agency's keep minus
   supplier penalties and tax due). Paid commission adjusts against
   the next payout.

8. KYC/TDS. PAN, own bank account, GSTIN and Udyam number if any.
   Agency deducts TDS where required, issues a certificate. If
   GST-registered, Consultant invoices commission [plus/inclusive of]
   GST.

9. CLIENT RECORDS. Client data and supplier rates stay in the
   Agency's system, used only for its bookings, deleted on exit.

10. DURING THIS AGREEMENT. No booking an introduced client elsewhere,
    or dealing directly with suppliers.

11. AFTER EXIT. No using the Agency's records or rates to solicit its
    clients; a client may still choose who to travel with.

12. COMPLAINTS/CALLS. Complaints to [named owner] within [24] hours,
    no refund promises from Consultant, who follows the Agency's
    calling/WhatsApp rules.

13. NOT EMPLOYMENT. No salary, no fixed hours; own phone. Agency sets
    only product, price and booking rules.

14. TERM. Either side ends this with [15] days' written notice. Booked
    files continue under clauses 6-7.

Signed ______________ Date ______ Place ______ (For the Agency)
Signed ______________ Date ______ Place ______ (The Consultant)

Clauses 2-3 exist because letting a consultant use your name can make their promises yours (Kuwait Airways). Clause 10 holds only during the term (Golikari); clause 11 stays within the two things Varun Tyagi says a post-exit clause may protect, confidential data and solicitation of clients, and even that is slow to enforce. Clause 13 records the facts the control test looks at; it helps only if the working reality matches.

Keep one row like this per file on the statement you pay against:

File no. | Client | Travel dates | Invoice value (ex-GST/TCS) | Supplier cost | Gross/Retained margin | Share % | Commission | TDS | Adjustments | Net payable | Paid on

Common questions

Commission on sale or on margin: which is fair?

Margin is fairer. Sale-based commission rewards closing at any price, even one erasing your margin; margin-based commission ties payout to yours.

Freelancer ko commission pe TDS katna padega?

It depends on your agency's legal form and size, and the consultant's PAN. A company, LLP, firm, or a proprietorship over ₹1 crore turnover deducts 2% on the whole amount once the year's commission crosses ₹20,000 (20% with no PAN); a smaller proprietor only past ₹50 lakh to that consultant.

Can a freelancer collect client payment in their own account?

No. Every rupee goes to the agency's account or payment link, never a consultant's personal account: the GST invoice, TCS and consumer-court exposure sit with whoever took the money.

Does the consultant need a GST number?

Only once their own turnover, mainly your commission, crosses ₹20 lakh a year (₹10 lakh in some special category states); package value doesn't count if the agency invoices and collects. If they're in another state, confirm with your CA.

The short version

• A consultant selling on your invoice is not a sub-agent: your agency carries the GST, TCS and consumer-court exposure for what they promise.
• Split commission on gross margin, not sale price, or every discount comes from your pocket alone.
• Pay commission only once the client has paid in full and travelled; anything earlier is an advance you may claw back.
• On cancellation, commission is the same share of what you retain after supplier penalties, never of what the client paid.
• From 1 April 2026, TDS is 2% on the whole amount once a consultant's commission crosses ₹20,000 in the year (20% with no PAN), only if your agency is a "specified person."
• You can't stop a client following a consultant who leaves; exclusivity holds during the term, not after.
• Never let a consultant invoice a client, collect TCS, or take payment into a personal account.