tour packages gst rate

GST on Tour Operator & Travel Agents

Radha Dhaked | March 20, 2023 March 20, 2023 | GST

Tourism is a significant contributor to the Indian economy, providing socioeconomic benefits and positively impacting industries like food manufacturing, services, and construction. It creates jobs, generates income and foreign exchange. The tourism and hospitality industry includes accommodations, catering, transportation, attractions, and travel agencies/tour operators. Learn more about the GST on tour and travel agencies below.

Business Models for Tour Operators

Tour operators can use different business models to sell travel-related services and merchandise.

The following are some popular business models for tour operators:

Tour Package: The tour operator includes their margin in the total fees charged, acting as a service provider that coordinates bookings with various counterparts.
Pure Agent Tour Operator : The tour operator helps travellers find suitable suppliers and facilitates transactions but only charges for their services, not the end service provided.
Flight and Hotel Booking with Backend Commission: The tour operator facilitates transactions and bookings without charging customers any fees. Instead, the ultimate supplier pays a commission to generate sales.

GST Registration for Tour Operator & Travel Agents

Every business in India whose aggregate turnover in a financial year is above Rs 40 Lakhs and Rs. 20 lakhs in special category states will have to get GST Registration Mandatorily.

So, tour operators and travel agents also need to get GST Registration Online as per above GST Registration Threshold Limit.

Furthermore, GST Registration is mandatory, if tour operators and travel agents make inter-state taxable supply or makes taxable supply of goods or service or both on behalf of other taxable people,

Learn in detail: GST Registration for tour operators

GST Implications on Various Travel Related Services by Agents

Gst on air ticket booking services by agents.

18% GST on commission income, service charges, and other charges collected from passengers
Input Tax Credit (ITC) available on GST paid on commission/service charge by an air travel agent
GST on travel agents’ commission is charged at 18%
The type of GST imposed depends on the location of supply

In addition to this, consider reading: GST on air tickets

GST on Sale of Tour Packages

5% GST on tour operator services without ITC
5% GST on gross commission/fee charged from the customer
GST on inbound tour fees charged on Principal basis at 5% without ITC
GST on inbound tour fees charged on Commission basis at 18% with ITC
GST on outbound tour packages being offered to a person based in India charged at the location of service receiver
No GST charged on commission received in convertible foreign currency for outbound tour packages offered to foreigner for visiting another foreign country

GST on Travel Related Services like Visa, Passport, etc. by an Agent or Company

No GST charged on government fees or consular charges paid for the particular services
18% GST levied on Service Charge paid on travel-related services like Visa, Passport, etc.
ITC can be claimed if the service is outsourced from another agent

Understand in detail: GST on passport and visa services

GST on Booking of Hotel/Cruise by Agent

Place of supply depends on the location of the hotel for domestic hotel bookings and the location of the service provider for international hotel bookings
GST charged on the commission received from passengers.
18% on Commission received from the hotel. ITC is available.
If the hotel invoice is not in the name of the client, the tax will be based on the full amount charged for the booking.
Depending on the situation, the applicable GST rate will either be 12%-18% with Input Tax Credit or 5% without Input Tax Credit.
However, for international bookings not within the taxable territory, no GST will be charged.

Watch our detailed video at: How GST applies on hotel business?

Also read: GST Registration for Hospitality Business

GST on Commission of Rail Travel Agents

18% GST levied on service charge (commission) collected from the customer
No commission is paid by the railways to such agents, and no GST levied in this case.
The SAC (Service Accounting Code) assigned to Rail travel agents is 9967.

GST on Rent-a-Cab Service

5% GST paid by cab operator on service charge collected from the customer on renting of a motor cab, including the cost of fuel
No ITC available on GST paid
All other renting services charged at 18% with ITC availability

In conclusion, The Indian tourism industry is vital for the economy, creating jobs and boosting various industries. Tour operators use different business models and must register for GST if their turnover exceeds the threshold limit or as per other GST regulations. GST implications on various services, such as air ticket booking, tour packages, hotel and cruise booking, and rail travel agents’ commission, vary based on a number of factors.

GST on Transportation Sector

Moreover, If you want any other guidance relating to GST Return Filing or GST Registration , please feel free to talk to our business advisors at 8881-069-069 .

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Travel Agent and Tour Operator Services: GST

April 13, 2023.

If you are a travel enthusiast who enjoys traveling but does not want to deal with the time-consuming process of searching for and booking hotels, transportation, and so on, you may be a travel-agent type of traveler, but you should be aware that your travel budget is not only exceeded by travel commission but GST is also paid for all such services. So you also pay the government. Determine how much of your budget is going to the government in the form of GST.

Definition:

Types of income sources for travel agents and tour operators:, 1. air ticket booking:, 2. hotel booking:, 3. services like visa/passport:, 4. rail ticket booking:, 1. inbound tour: india tour for foreign travelers, 2. outbound tour: foreign tour for an indian/foreigner, conclusion:, frequently asked questions:.

A “Travel Agent” is a person or entity who acts as an intermediary and sells holiday packages and tours. Their services include accommodation, rail/air ticket booking, sightseeing, cab pickup drop, etc. The services they provide are commission based, on which they receive a certain amount of commission which is taxable and falls under the GST regime.

“The Tour operator” is a person or organization responsible for organizing, planning, and scheduling trips and holiday packages. They are brokers who provide such services and charge brokerage or fees for the same. The amount of brokerage is taxable, and GST is applicable to it.

A travel agency has two significant sources of income from which they can charge commission/service fees by raising an invoice to below mentioned:

1. The airline/hotels – actual service providers

2. Customer/Client

Let us check how much and what % of GST is applicable in either of the above ways.

Chargeable Services of Travel Agents

The chargeable services of Travel Agents are as follows:

1. Air Ticket Booking

2. Hotel Booking

3. Services like Visa, Passport

4. Rail Ticket Booking

Now, let us understand what percentage of GST applies to the services mentioned above:

18% GST will be applicable on the commission received by an agent through the airline as well as the service charges collected from the customer. Now let us understand the bifurcation of GST to be paid on the commission received from Airlines and Air travelers.

GST on Commission received from Airlines:
In the case of Domestic Air Ticket – 18% on 5% of the Basic fare.
In the case of International Air Ticket – 18% on 10% of the Basic fare.
GST on processing fees received from Air Traveller:
GST @ 18% on the invoice value from Air Traveller.

GST will be applicable on bookings done through agents or intermediaries. Again, two ways GST will be charged, so let us understand in detail so we can get know which type of GST will be applicable, i.e. ( IGST or CGST + SGST )

When the Agent receives a commission from the Hotel:
If the Hotel is located in India, i.e., domestic, then the place of supply will be the location of the Hotel.
If the Hotel is located outside of India, the place of supply will be the Agent’s location.

Let us comprehend all of this using an example:

• When the Agent receives a commission from Traveller:

If a traveler is registered, then the place of supply will be the traveler’s location.
If the traveler has not registered, the location of the supply will be the Hotel.

Visa and Passport services can be provided in two ways:

• Visa Statutory Authorities:

If a customer directly approaches Visa Statutory Authorities, then the charges charged by the Statutory Authorities are exempted from GST.

• Visa Facilitation Centres:

If a visa/passport is obtained from facilitation centers or through a travel agent, then the same shall be taxable. When an air travel agent provides these services by adding his commission, the same will be taxable at 18% GST, and he can take ITC of the tax paid to Visa Facilitation Centres.

A traveler has two ways to book a train ticket. He can book it through a rail travel agent or directly through railways. If he books a ticket through a rail travel agent, then GST will be applicable at 18% on the commission charged by the Agent to the traveler. At the same time, no commission is paid by the railways to the Agent for the booking.

These were the GST on several services provided by the Agent. Now, what about the GST on the Tour operator services or company? They sell entire tour packages and let’s check whether they will be liable to pay GST.

A. If Service provider and Recipient, both are in India:

1. Recipient is Registered – Place of supply will be the location of the recipient.

2. Recipient is Unregistered – Place of Supply will be the location of the recipient, if the address on records exists.

B. If Either the Service Provider or Recipient is outside India:

GST on the Sale of Tour Packages

➢ If the customer is charged on a principal basis for the inbound tour, 5% GST will be charged without benefit to claim ITC.

➢ If the customer is charged on a commission basis for the inbound tour, then 18% GST will be charged with the benefit of claiming ITC.

If the customer/traveler is made to pay on a principal basis and also registered, the place of supply will be the location of the customer.
If the customer/traveler is charged on a principal basis, but is not registered, then the place of supply will be the customer’s location per the service provider’s records.

According to the detailed explanation above, all services provided by travel agents or tour service providers to customers are subject to taxation under the GST tax regime. So, make sure you understand the GST that your travel agent charges you for the services he provides, so you can plan your next trip budget with confidence.

1. What is the full form of ITC?

Ans: ITC means Input Tax Credit.

2. What is the meaning of Input Tax Credit?

Ans: Input Tax Credit is the tax a business can claim to reduce their tax liability to the limit of GST paid on purchases.

3. Can air travel agents avail for ITC?

Ans: Yes, the air travel agents can avail of ITC on GST paid on the commission received from the passenger/traveler.

4. Is GST applicable to the cab service providers like Ola, Uber, etc.?

Ans: Yes, Cab service providers like Ola and Uber are liable to pay GST to the government as per section 9(5) of the CGST Act.

5. Are Cab drivers liable to get registered and pay GST?

Ans: No, it is not mandatory for cab drivers to register, and they are also not liable to pay any tax.

6. What if I want to avoid claiming ITC? How much GST do I have to pay?

Ans: You are liable to pay 5% GST on the total amount if you want to avoid claiming ITC for CAB rental services

7. What is SAC? And what is the meaning of it?

Ans: SAC code means Services Accounting Code. SAC is applied to all the services provided within India.

8. Why is the SAC code used?

Ans: SAC code is used to bifurcate, identify and determine the type of services provided and the rate of tax to be charged.

9. Why is it necessary to know the place of supply of the Agent?

Ans: Place of Supply will help us to determine the type of supply, i.e. Intra- State or Interstate.

10. What is the complete form of the HSN Code?

Ans: HSN Code means Harmonized System of Nomenclature Codes.

11. What is the difference between the HSN and SAC codes?

Ans: SAC codes are used for the provision of services, whereas HSN codes are used for the Sale of Goods.

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GST on Travel Agents and Tour Operator Services

The travel and Tourism sector holds great strategic importance in the Indian economy, providing several socio-economic benefits. Apart from providing employment, income, foreign exchange for the country, the trade in the tourism sector has an economically positive impact on other associated industries such as food manufacturing, services, construction, etc. In addition, investments in infrastructural facilities such as transportation, accommodation, and other tourism-related services lead to the overall development of infrastructure in the economy.

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All you need to know about Taxation of Travel Industry!

What is a tour operator.

“Tour operator” means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing, or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours.

Two Major Business Models of Tour Operators

Tour Operator who works to provide Tour Package: Here total booking is done by the tour operator and the total fees charged shall include his margin. So the Tour Operator become service provider and in turn he receives services from various other counterparts like Airline Companies, Hotel, Local Taxi Operators, Restaurants, Embassy issuing visas.

Tour Operator who works just as a pure agent: The tour operator only facilitates the transaction and helps traveller to identify various suppliers as per their requirements and arrange for its booking. Payment flow goes straight away from actual traveller to end service provider and tour operator only charges for its service portion from traveller.

As per rule 33 of CGST Rules 2017 – Value of supply of services in case travel agent acts as Pure agent is, the expenditure or costs incurred by a supplier as a pure agent of the recipient of supply shall be excluded from the value of supply, if all the following conditions are satisfied, namely,-

(i) the supplier acts as a pure agent of the recipient of the supply, when he makes the payment to the third party on authorisation by such recipient;

(ii) the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and

(iii) the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account.

Explanation - For the purposes of this rule, the expression “pure agent” means a person who-

(a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both;

(b) neither intends to hold nor holds any title to the goods or services or both so procured or supplied as pure agent of the recipient of supply;

(d) receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account.

Hotel and Flight booking with Backend Commission- Here Tour operator does not charge any fees from the customer. He only facilitates the transaction and help traveller to identify various suppliers as per their requirements and arrange for its bookings. In turn the ultimate supplier pays commission for promotion and generating sales for them. It is mainly used in Hotel Booking & Flight Booking.

GST Applicability on Tour Operator Business

Every tour operator who has a turnover of more than Rs. Twenty lakhs in a fiscal year shall mandatorily obtain GST Registration. Furthermore, in the case of specific categories or particular states, the turnover limit is Rs. ten Lakhs. In simple words, tour operators in states:

Arunachal Pradesh
Jammu & Kashmir
Himachal Pradesh
Uttarakhand

Will have to obtain GST Registration and do GST Return Filing if their annual turnover is more than ten Lakhs Rupees.

However, it is essential to note that the threshold limit of turnover doesn’t apply in some cases. For example, the person making inter-state taxable supply. To illustrate, a person who, as an operator or otherwise, provides taxable supplies of goods or services, or perhaps both, on account of another taxable person, such as an air travel agency, must get GST Registration in India.

GST on Different Types of Income Sources of Tour Operators

A travel agency/agent may earn his/her commission from two major sources: the actual service provider (airlines, hotel, etc.), and the customer, and therefore, will produce two different invoices, as follows:

GST on Air Ticket Booking Services by Agents

18% GST will be levied on the commission income earned by air travel agents from airlines as well as on service charges and other charges collected from the passengers.

ITC is available on GST paid on commission/ service charge by an air travel agent.

Commission/incentive paid by the airline company

In case of Domestic ticket – 5% of basic fair
In case of International ticket – 10% of basic fair

GST on travel agents commission is charged at the rate of 18%.

The type of GST (CGST/IGST/SGST) to be imposed on the commission income of a travel agent depends on the location of supply.

Customer located in India & registered under GST: location of the customer
Customer located in India, not registered under GST, but address available: location of the customer
Customer address not available: location of the agent

GST on the Sale of Tour Packages

There is 5% GST on tour operator services or company, without the benefit of ITC. 5% GST will be paid on the gross commission/fee charged from the customer.

From GST perspective, the tour packages can be divided into the following two categories:

1. Inbound Tour – tour of India for foreigner travelers

If the inbound tour fee is charged on Principal basis, GST shall be charged at the rate of 5% without ITC.

If the inbound tour fee is charged on Commission basis, GST shall be charged at the rate of 18% with ITC.

2. Outbound tour – Tour outside India for an Indian/foreigner

For outbound tour packages being offered to a person based in India, the location of supply will be the location of the service receiver.

For outbound tour package offered to a foreigner for visiting another foreign country, there is no GST charged on the commission received in convertible foreign currency.

GST on Travel Related Services like Visa, Passport, etc. by an Agent or Company

GST is not charged on any govt fees or consular charges paid for the particular services on behalf of the customer.

GST @18% will be levied on the Service Charge paid on travel-related services like Visa, Passport, etc.

ITC on GST paid can be claimed if the service is outsourced from another agent.

GST on Booking of Hotel/Cruise by Agent

In case of domestic hotel, the location of the hotel shall be the place of supply. And in case of international hotel booking, the place of supply shall be the location of the service (booking) provider (agent/company).

For hotel booking services, GST will also be charged on the commission received from passengers.

GST on Commission of Rail Travel Agents

18% GST is levied on the service charge (commission) collected by a rail travel agent from the customer.

No commission is paid by the railways to such agents, and therefore no GST is levied in this case.

GST on Rent-a-Cab Service

5% GST will be paid by a cab operator on the service charge collected from a customer on renting of a motor cab, including the cost of fuel.

No ITC is available on the GST paid.

For all other renting services, not covered above, GST will be charged @18% with ITC availability.

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Tour Operator under GST

Tour operator under gst.

“Tour operator under GST” means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sight-seeing or other similar services) by any mode of transport and includes any person engaged in the business of operating tours

Registration limit under Tour Operator under GST

Every supplier whom aggregate turnover in financial year exceeds Rupees 20 Lakhs shall be liable to be registered under GST. The Limit is 10 Lakhs in case of special category of states.

Further threshold limit of Rs. 20 Lakhs is not applicable in following cases

Peron making any inter-state taxable supply
Person who makes taxable supply of goods or service or both on behalf of other taxable person whether as an agent or otherwise, such as Air Travel Agent.

Activities include in Tour operator under GST

Air travel agent, rail travel agent.

Rent-A-CAB Service
Tour Package- inbound & outbound
Visa & Passport Assistance
Hotel Booking Services
Travel Insurance Services
Other Services (amusement facilities, joy rides like camel ride, elephant ride, horse ride, boat ride, jeep safari, porter services, guide services etc)

Case-1: Air Travel Agent opts to pay GST on basis fare module

Air travel agents will raise 2 invoices..

Note: In case an air travel agent opts to pay GST on basic fare module, he is not required to pay GST on commission received from the airlines as well as service charges / booking charges / management charges from the customer / passenger. (Domestic Booking)

Case-2: Air Travel Agent opts to pay GST on Commission module

1st Invoice : Service fees @ 18% on invoice value to passenger. ITC is available
2nd Invoice : 18% on Commission receive from Airlines Company. ITC is available

Principal to Principal billing

* Input credit at time of service has been received ** due immediately

Place of supply:, commission from passenger:.

Case 1 : Service receiver located in India & his address is availabl e: Location of service Recipient Case 2 : Service Receiver address not available : Location of Service Provider

Commission from Airlines:

Case 1: Location of Airlines in India : Location of Service recipient Case 2: Location of Airlines outside India : Location of service Provider

GST Return filing Service

GST rate will be 18% on service charges collected from passengers. No commission is paid by the railways, So, no other option rate is applicable in this case.

SAC in the case of Rail Travel Agent will be 9967.

Place of supply : Location of service Recipient

There are 2 methods of invoice:

If the invoice not showing margin separately then tax liability shall be on the gross amount charged
If invoice showing margin separately then tax liability shall be @ 18% of margin shown only (rule 33)

Rent-A-Cab Service

Commission basis gst applicable rate will be @18%, net cost & mark-up basis.

Case-1 : where the cost of fuel is included in the consideration charges: GST Applicable rate will be @5% without ITC or @12% with ITC

Case-2: where the cost of fuel is not included in the consideration charges: A Cab operator is required to pay GST@ 18% with ITC.

SAC in the case of Rent-A-CAB service is 9967.

There are 2 methods of invoicing if operator hired cab:

Gst return filing:, tour package- inbound & outbound, inbound tour package:.

Tours organized by the Tour Operator, within India for the tourist coming from outside India is known as inbound tours.

Note : If Tour operator avail any services from another Tour Operator as input service then ITC on such input services which is similar to his output can be taken. (Notification No. 1/2018- Central Tax (Rate), dated 25 th January, 2018) (5% on total value not mark-up)

Commission basis: If the tour is on Commission basis then taxable @ 18% with ITC & place of supply shall be location of Service Provider i.e.in India
Service fees on client basis: If hotel/ transporter issues invoice directly in the name of the client and the tour operator issues invoice only for its service fees to the client. The agent will issue an invoice on the client disclosing separately for its service charges and amount charged by the hotel/ transporter for booking. The agent can charge GST @ 18% of service charge only with ITC or GST @5% without ITC

Outbound Tour Package:

Tours organized by the Tour Operator, outside India, for the tourist going outside India is known as outbound tour.

Commission basis: If the tour is on Commission basis then taxable @ 18% with ITC & place of supply shall be location of Service Provider i.e.in India
Service fees on client basis: If hotel/ transporter issues invoice directly in the name of the client and the tour operator issues invoice only for its service fees to the client. The agent will issue an invoice on the client disclosing separately for its service charges and amount charged by the hotel/ transporter for booking. The agent can charge GST @ 18% of service charge only with ITC or GST @5% without ITC

Note : Outbound tour sold to a foreigner for visiting another foreign country & the payment received in foreign country is exempt from GST.

Visa & Passport Assistance

Visa & Passport Assistance is required to pay GST@ 18% with ITC.

VFS will issue invoice directly in the name of custom er, hence agent will charge GST only on his fees and w ill not be able to take the credit of GST charged by VFS to the client

Hotel Booking Services

Room Rent upto Rs 7500/- per day = GST Rate@12%

Room Rent above Rs 7500/- per day = GST Rate@18%

Without ITC

Methods of invoicing

Commission from hotels : 18% on Commission receive from hotel. ITC is available
Invoice raise by hotel in the name of client: The agent will issue an invoice on the client disclosing separately for its service charges and amount charged by the hotel for booking. The agent can charge GST @ 18% of service charge only with ITC or GST @5% without ITC (rule 33)
Invoice raise by hotel not in the name of client: If the invoice raised by the hotel is not in the name of client, then tax liability shall be on the full value of amount charged for hotel booking @12%-18% with ITC or @ 5% without ITC
Not in taxable territory: International booking not in taxable territory GST @ 0%

Place of supply:

Commission from hotel:.

Domestic Hotel : Location of Hotel
International Hotel : Location of Service Provider
Location of Service Recipient is in India : Location of Service Recipient
Location of Service Recipient is out of India : Location of Hotel

GST Return filing Services

Car hire services.

Travel agent may receive income for booking of Car hire on the following 2 methods:

Principal basis: If car hire service is on Principal basis i.e. the travel agent may purchase the car on hire on its own name and raises bill to the clients, then GST @5% with no ITC (@18% with ITC)
Commission basis: If the car hire service is on Commission basis then taxable @ 18% with ITC

Travel Insurance Services

Travel Insurance Agent is required to pay GST@ 18% with ITC or 5% without ITC

Other Services

Amusement facilities / joy rides like camel ride, elephant ride, horse ride, boat ride, jeep safari services attract GST@ 28% with ITC or 5% without ITC. SAC code as 9996.

Porter services, guide services attract GST@ 18% with ITC or 5% without ITC. SAC code is 9985

DISCLAIMER : The views expressed in this article are of the author(s) personal views. The information cited in this article has been drawn from various sources. While every effort has been made to keep the information cited in this article error free, Author does not take the responsibility for any typography or clerical error which may have crept in while compiling the information provided in this article. The content of this article are for knowledge purpose only we accept no responsibility or liability for any loss or damage or any violation of laws that may cause.

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Due Dates: GSTR 3B, GSTR 1, (GSTR 9, and GSTR 9C) and GSTR 4 Respectively as Follows: 20 March, 11 March , 31 March and 18 Apr 2020 (Read a Guide)

GST Rate on Travel Agents & Tour Operator Services in India

September 30, 2019

GST is an indirect tax which is levied on the supply of goods and services of different kinds. The services provided by a travel agent or travel agency are also under the GST ambit. Here, we talk about the applicability and rate of GST on travel agents and tour operator services.

A travel agent is a person or entity that offers services related to planning, scheduling (booking) and managing trips/tours to their customers. The services provided by a travel company may include booking air/rail accommodation, cab hire, accommodation, sightseeing, etc.

A tour operator, agent or planner provides services on behalf of Airline companies, hotels, taxi operators, and others and get a commission/fee for the same. GST is charged on the commission amount.

GST on Different Types of Income Sources for a Travel Agent/Company

GST on Air Ticket Booking Services by Agents

18% GST will be levied on the commission income earned by air travel agents from airlines as well as on service charges and other charges collected from the passengers.

ITC is available on GST paid on commission/ service charge by an air travel agent.

Commission/incentive paid by the airline company

In case of Domestic ticket – 5% of basic fair
In case of International ticket – 10% of basic fair

GST on travel agents commission is charged at the rate of 18%.

The type of GST (CGST/IGST/SGST) to be imposed on the commission income of a travel agent depends on the location of supply.

Customer located in India & registered under GST: location of the customer
Customer located in India, not registered under GST, but address available: location of the customer
Customer address not available: location of the agent

GST on the Sale of Tour Packages

There is 5% GST on tour operator services or company, without the benefit of ITC. 5% GST will be paid on the gross commission/fee charged from the customer.

From GST perspective, the tour packages can be divided into the following two categories:

1. Inbound Tour – tour of India for foreigner travelers

If the inbound tour fee is charged on Principal basis, GST shall be charged at the rate of 5% without ITC.

If the inbound tour fee is charged on Commission basis, GST shall be charged at the rate of 18% with ITC.

2. Outbound tour – Tour outside India for an Indian/foreigner

For outbound tour packages being offered to a person based in India, the location of supply will be the location of the service receiver.

For outbound tour package offered to a foreigner for visiting another foreign country, there is no GST charged on the commission received in convertible foreign currency.

Recommended: GST Impact on Tourism Industry in India

GST on Travel Related Services like Visa, Passport, etc. by an Agent or Company

GST is not charged on any govt fees or consular charges paid for the particular services on behalf of the customer.

GST @18% will be levied on the Service Charge paid on travel-related services like Visa, Passport, etc.

ITC on GST paid can be claimed if the service is outsourced from another agent.

GST on Booking of Hotel/Cruise by Agent

For hotel booking services, GST will also be charged on the commission received from passengers.

GST on Commission of Rail Travel Agents

18% GST is levied on the service charge (commission) collected by a rail travel agent from the customer.

No commission is paid by the railways to such agents, and therefore no GST is levied in this case.

GST on Rent-a-Cab Service

5% GST will be paid by a cab operator on the service charge collected from a customer on renting of a motor cab, including the cost of fuel.

No ITC is available on the GST paid.

For all other renting services, not covered above, GST will be charged @18% with ITC availability.

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What is Meant by Tour Operator?

“Tours operators” are persons engaged in the planning, scheduling, organising, and arranging of tours (including accommodations, sightseeing, or other similar services) by any mode of transportation. Tour operators include anyone who operates tours as a business.

Business Models – Tour Operators

There are several business models which are relevant in the travel industry. Vendors sell travel-related merchandise, airline tickets, temporary accommodation for travellers, bookings, reservations, and other services . Vacation rental owners and managers typically use this space to advertise their items in order to increase business opportunities and awareness. According to Statista research, the revenue share of the online worldwide travel and tourism market will be 65% from 2017 to 2025, making it a profitable business with multiple income methods.

Also Read: What are the 6 Profitable Dealership Business Ideas in India?

Tour Package:

The tour operator makes the entire booking here, and the total fees charged include his margin. As a result, the Tour Operator becomes a service provider and receives services from a variety of counterparts, including airlines, hotels, taxi operators, restaurants , and embassies issuing visas.

Pure Agent Tour Operator:

A pure agent tour operator facilitates the transaction and assists travellers in finding suitable suppliers based on their requirements. Travellers pay directly to the end service provider, and the tour operator only charges them for its services.

By Rule 33 of CGST Rules, 2017 – Value of supply of services: If the travel agent acts as a pure agent, they can exclude the supplier expenses if they meet the following criteria.

When the supplier makes the payment to the third party on behalf of the recipient, he acts as a pure agent of that recipient.
Pure agents issue invoices to recipients of services separately, indicating their payment on behalf of the recipients of services.
In addition to the services the pure agent provides on his account, the pure agent procures supplies from the third party as a pure agent of the supplier.

Flight and Hotel Booking with Backend Commission

Using backend commissions for hotel and flight bookings mean that no fees are charged to the customer by the tour operator. As part of his service, he facilitates transactions, helps travellers identify suppliers according to their needs, and arranges their bookings. The ultimate supplier then pays a commission to promote and generate sales. Hotel bookings and flight bookings are primarily made with it, making it a lucrative form of revenue model.

GST Registration Requirements

GST registration is mandatory for all suppliers whose aggregate turnover exceeds ₹ 26,00,000 in a financial year. Category states are subject to a limit of ₹ 10,00,000.

Further, the threshold limit of ₹ 20,00,000 is not applicable in the following circumstances:

Also Read: Start A Reliance Petrol Pump Dealership Business

Taxable inter-state supply by a person

As an agent or otherwise, an air travel agent makes taxable supplies of goods or services on behalf of another taxable person.

Travel Agents Outward Supply – SAC Codes

The following table lists the SAC codes of travel agents for outward supply.

How is GST Calculated on These Items?

Besides receiving commissions from airlines for booking air tickets, air travel agents also receive processing fees. Airlines book tickets on behalf of a client. It is necessary to generate two separate invoices since the income is by airlines and clients.

Passenger commissions / PLB (performance linked Bonus)/ upload incentives/service fees must include GST.

The First Option

On the issue of invoices on airline/consolidated, they will charge GST at 18% on commissions, PLA upload incentives (Production Linked Incentive ), or any other incentives. The service fee is 18% on invoices issued to passengers.

The Second Option

According to CGST Rule 32, an air travel agent can charge 5% on the value of the supply of services relating to booking air tickets. Passage by air charges 10% of the basic fare for domestic and 10% for international bookings.

Also Read: Online Business: Advantages and Disadvantages

Is IGST or CGST/SGST to be Imposed?

By Sec. 12(2) of the IGST Act, air travel agents provide services to persons in India who are registered under the GST law, and the place of supply is the location of the service receiver.

It shall be the location of the receiver of the services if the person is in India and not registered under GST but whose address is on record.

If a service is provided to an Indian resident who is not registered under the GST Law and whose address is not on record, then the place of supply shall be the service provider’s address.

Commission on Hotel Bookings

As far as hotel bookings are concerned, the tour operator acts as an intermediary. For domestic hotel bookings, the collection place of supply is the hotel’s location per the general rule. For international hotel bookings, the collection site is the agent’s location.

When both the Tour operator and the recipient of the service are in India, the place of supply shall be –

If the recipient is a registered person, the location of the recipient
In the case of an unregistered recipient,

a. The area where the recipient’s address is recorded

b. In all other cases, the site of the service provider

The place of supply, in this case, shall be the location where the services are performed when the Tour operator’s background is in India and the recipient’s area is outside of India.

With no ITC benefit, GST will be 5%

Also Read: The Rewarding World of Money Earning Websites

Car Rental Services and Travel Insurance

The provision of a car on hire (with or without a driver) to the passenger or any agent for service charges and markups.

If the recipient of the services is registered under the GST law, the place of supply is the location of the service recipient. The collection area shall also be the location of the service recipient if the recipient is not registered under the law, but his address appears in the records. The place of supply shall be the service provider’s location if the person’s address is unavailable.

The service recipient must pay 18% GST on motor cab rentals if the recipient bears fuel costs.

Travel agents issue Mediclaim and travel insurance through various providers. They receive commissions either on a cut-and-pay basis or at the end of the month (for overseas policies). Registered insurance agents must issue medical insurance and travel insurance policies in India. By the 1938 Insurance Act, agents must register with the IRDA.

If you register under GST law , you shall consider a GST-registered recipient in India.

Similarly, if the recipient is not registered under the law, their location is found in the records. The place of supply shall be the location of the service recipient. The service provider’s location shall be the place of supply if the person’s address is unavailable on records.

Mediclaim policies or travel insurance services provided to a person outside India fall under the ‘Intermediary’ services category. Thus, the place of supply shall be the service provider’s location.

The GST rate for this service is 18%.

Railway Commission

The place of supply shall be determined based on Section 13(9) if the agent receives a commission from a foreign railway company with its registered office outside of India, i.e. the agent’s place of business.

Whenever an agent receives commissions from a foreign railway company with its headquarters in India, the place of supply shall be determined under Section 12( 2), i.e. The place where the service is provided to a registered person.

In the absence of a registered recipient, the location of the provider of service shall be the address on record of the recipient in any other case.

According to Section 12(2 ), if the agent receives Service charges from the Pax, the place of supply shall be determined as follows: A registered person’s location. If such a person is not registered, the collection position shall be determined as follows:

Located at the address on record for the recipient
In any other case, the location of the service provider

Railway bookings are subject to 18% GST.

After reading this article, you will have a clear idea of all the GST-related queries regarding tour and travel agents in India. The GST for travel agents and tour operators in India continues to be an ideal system of taxation which considers every intricacy of the trade and provides suitable options for taxation.

For example, GST must be levied and paid at the time of payment or invoice, whichever comes first. As a result, for GST purposes, a firm must recognise revenue on a payment basis. However, if a company chooses to serve as a ‘Pure Agent,’ the GST will be charged when the final invoice is raised, or the commission is received, whichever comes first.

Such an adjusting system has helped the industry take a leap and has been a huge boost for its growth.

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Calculating the GST/HST on Tour Packages

From: Canada Revenue Agency

GST/HST memorandum 27.1 June 2009

Note: This memorandum of Chapter 27 supersedes GST/HST Memorandum 27.1, Zero-Rated Travel Services , dated November 2006.

This memorandum explains that suppliers who sell tour packages are required to identify the various elements of the package in order to determine the amount of the goods and services tax/harmonized sales tax (GST/HST), if any, that they must collect. It also sets out the rules for determining the portions of the tour package that are subject to tax at 5%, 13% or 0% under the Excise Tax Act (the Act).

Characterizing the supply

Taxable portion, non-taxable portion, separate supplies, first supplier, taxable percentage, initial taxable percentage, base percentage, determining the consideration for the taxable portion, documentation, additional information, appendix a – characterizing the supply being made, appendix b – certificate of zero-rated entitlement.

The information in this memorandum does not replace the law found in the Excise Tax Act (the Act) and its regulations. It is provided for your reference. As it may not completely address your particular operation, you may wish to refer to the Act or appropriate regulation, or contact a Canada Revenue Agency (CRA) GST/HST Rulings Centre for more information. These centres are listed in GST/HST Memorandum 1.2, Canada Revenue Agency GST/HST Rulings Centres . If you wish to make a technical enquiry on the GST/HST by telephone, please call 1-800-959-8287.

If you are located in Quebec and wish to make a technical enquiry on the GST or obtain a ruling, please call Revenu Québec at 1-800-567-4692. For general information, please visit their Web site at www.revenu.gouv.qc.ca .

Reference in this publication is made to supplies taxable at 5% (the rate of the GST) or 13% (the rate of the HST). The HST applies to supplies made in Nova Scotia, New Brunswick, and Newfoundland and Labrador (the “participating provinces”). If you are uncertain as to whether a supply is made in a participating province, you may refer to GST/HST Technical Information Bulletin B-078, Place of Supply Rules Under the HST .

1. Typically, suppliers such as tour operators purchase passenger transportation services, short-term and/or camping accommodation, sightseeing excursions, and other property and/or services which they assemble into tour packages and supply for an all-inclusive price. Suppliers who sell tour packages in Canada must prorate the selling price of a package based on the value of the taxable and non-taxable property and services included in the package in order to determine the amount of the GST/HST that they must charge.

2. There are rules that must be applied when prorating the selling price of a tour package based on the value of the taxable property and services included in the package. Generally, taxable property and services are the property and services included in a tour package that, if supplied separately and not as part of a package, would be taxable at 5% or 13%. Before applying the rules found in section 163, the supplier must ensure that what is being supplied is a tour package.

Meaning of tour package ss 163(3)

3. The term “tour package” means a combination of two or more services, or of property and services, that includes transportation services, accommodation, a right to use a campground or trailer park, or guide or interpreter services, where the property and services are supplied together for an all-inclusive price. A tour package is a single supply of a service for GST/HST purposes.

4. The meaning of a tour package under the Act could result in a single supply that is a combination of two or more services, or of property and services, being considered a tour package for GST/HST purposes even though the package may not fit the common perception of a tour package. The reverse is also possible; that is, something that may appear to be a tour package may not, in fact, be a tour package for GST/HST purposes.

A registrant supplies Japanese tourists with a package that includes a meal at a restaurant, a ticket to a sporting event, and the services of an interpreter. The property and services are supplied together for an all-inclusive price. Although this package may not fit the common perception of a tour package, it is a tour package for GST/HST purposes.

A registrant supplies international students with an all-inclusive package that includes instruction in English as a second language, books and instructional materials, three meals per day, recreational activities, and accommodation. This is a supply of a service of instructing individuals in English as a second language. It is not a supply of a tour package.

5. As in any transaction, it is important to characterize properly what is being supplied in order to determine how the GST/HST applies to the particular transaction. The nature and purpose of a package being sold has to be considered in order to determine whether it is a tour package or something else. For example, if the overall purpose of a package is to provide a specialized service, it is not considered to be a tour package for GST/HST purposes. Examples would be wellness packages, educational and counselling packages, children’s overnight camps, sports tournaments, and concert tours. As illustrated in Example 2, one should not assume that every combination that includes elements such as passenger transportation services or accommodation is a tour package for GST/HST purposes.

Portions of a tour package

6. A tour package may include property and services taxable at different rates (i.e., 0%, 5% or 13%) if supplied separately and not as part of the tour package. The tour package may also include property and services that, if supplied separately and not as part of the tour package, would be exempt or provided outside Canada, and therefore not subject to the GST/HST.

7. The rules that apply when dividing a single supply of a tour package into a taxable portion and a non-taxable portion, and then further subdividing the taxable portion into the non-provincially taxable portion and the provincially taxable portion are explained below.

Meaning of taxable portion ss 163(3)

8. The term “taxable portion” of a tour package means all property and services included in the tour package and in respect of which the GST/HST would be payable if the property or service were supplied otherwise than as part of the tour package (other than zero-rated supplies of property and services).

Meaning of provincially taxable portion ss 163(3)

9. The term “provincially taxable portion” of a tour package, in respect of a participating province, means all property and services that are included in the tour package and the supplies of which, if made otherwise than as part of the tour package, would be supplies made in the participating province for which the 13% HST would be payable.

Meaning of non-provincially taxable portion ss 163(3)

10. The term “non-provincially taxable portion” of a tour package means all property and services included in the taxable portion of the tour package that are not included in the provincially taxable portion of the tour package. In other words, the non-provincially taxable portion of a tour package refers to all property and services included in a tour package that, if supplied separately and not as part of the tour package, would be supplies made outside a participating province and subject to the 5% GST. The taxable portion of a tour package is equal to the non-provincially taxable portion if none of the property and services included in the tour package would be supplies made in a participating province, if supplied separately and not as part of the tour package.

11. A supplier would only have to determine the provincially taxable portion of a tour package if the package included property or services which, if supplied otherwise than as part of the tour package, would be supplied in a participating province..

Sch. VI, Part VI, s 1

12. The non-taxable portion of a tour package includes any property or services included in the tour package that, if supplied separately and not as part of the tour package, would be zero-rated or exempt, or not subject to tax. This would include, for example, accident and sickness insurance, certain international passenger transportation services, and accommodation provided outside Canada. More information on accident and sickness insurance can be found in paragraphs 41 and 42. More information on international passenger transportation services can be found in Appendix B.

A registrant sells a two-week package that includes a 10-day cruise from St. John’s, Newfoundland and Labrador, to Iqaluit, Nunavut, two nights accommodation in St. John’s, sightseeing in St. John’s, two nights accommodation in Iqaluit, and sightseeing in Iqaluit. The registrant sells the package for an all-inclusive price.

All property and services included in this tour package are in the taxable portion of the package. The package includes property and services that, if supplied separately and not as part of the tour package, would be supplies made in Newfoundland and Labrador (i.e., a participating province). As a result, the registrant must determine the part of the taxable portion that is the provincially taxable portion and the part that is the non-provincially taxable portion, if any.

The property and services listed below, if supplied separately and not as part of the tour package, would be supplies made in Nunavut. They form the non-provincially taxable portion of the tour package:

accommodation in Iqaluit; and
the sightseeing in Iqaluit.

The property and services listed below, if supplied separately and not as part of the tour package, would be supplies made in Newfoundland and Labrador. They form the provincially taxable portion of the tour package:

accommodation in St. John's;
the sightseeing in St. John's; and
10-day cruise to Iqaluit. If supplied separately, this cruise would be supplied in Newfoundland and Labrador because the origin of the continuous journey, which includes this passenger transportation service, is in that province, and the termination and all stopovers are in Canada. (For more information on the place of supply of passenger transportation services, refer to GST/HST Memorandum 28.3, Passenger Transportation Services )

Note that this tour package does not have a non-taxable portion.

ss 163(2) and (2.1)

13. For purposes of determining the GST/HST payable on a tour package, the provision of the non-provincially taxable portion, the provincially taxable portion, and the non-taxable portion are deemed to be supplies that are separate from, and not incidental to, the provision of the other parts, if any.

Place of supply ss 163(2) and (2.1)

14. In addition, for purposes of determining the GST/HST payable on a tour package

the provision of the non-provincially taxable portion of the tour package is deemed to be a supply made outside a participating province, and therefore is taxable at 5%; and
the provision of the provincially taxable portion of the tour package is deemed to be a supply made in the participating province, and therefore is taxable at 13%.

15. The non-taxable portion of a tour package is a zero-rated supply.

The registrant in Example 3 sold the two-week package. For purposes of determining the GST/HST payable on the tour package, the registrant is deemed to have made separate supplies of the non-provincially taxable portion, which is taxable at 5%, and of the provincially taxable portion, which is taxable at 13%.

Taxable percentage of the relevant portion

Meaning of first supplier ss 163(3)

16. The term “first supplier” in respect of a tour package means the person who first supplies the tour package in Canada. For example, a person who purchases various property and services and then assembles these elements into a tour package, which the person then supplies in Canada, is the first supplier of the tour package. Similarly, a person who purchases an existing tour package and adds property and/or services to create a new tour package, which the person then supplies in Canada, is the first supplier of the new tour package.

17. A person who substitutes elements in an existing tour package that has already been sold may be the first supplier of the new tour package if the nature of the package has changed. See GST/HST Policy Statement P-249, Agreements and Novation , for information on when changes to an agreement result in a new agreement.

A registrant purchased the two-week package described in Example 3 and added it to its own one-week tour package. The registrant then supplied this new three-week tour package in Canada. The registrant is the first supplier of the new three-week tour package.

A registrant purchased the two-week package described in Example 3 and sold it to a consumer. For reasons beyond the registrant’s control, the accommodation in St. John’s was not available and the registrant had to substitute the accommodation with similar accommodation at a similar hotel in St. John’s for the same price as the original accommodation. The nature of the tour package has not changed, and therefore the registrant is not the first supplier of a new tour package.

18. The first supplier must calculate the taxable percentage for the non-provincially taxable portion of the tour package and/or the provincially taxable portion of the tour package, as the case may be, (i.e., the relevant portion).

Meaning of taxable percentage ss 163(3)

19. The term “taxable percentage”, at a particular time, in respect of the provincially taxable portion of a tour package or the non-provincially taxable portion of a tour package, as the case may be, (i.e., the relevant portion) means

where the difference between the base percentage at that time in respect of the relevant portion and either the initial taxable percentage in respect of the relevant portion or the base percentage at an earlier time in respect of the relevant portion is more than 10 percentage points, the base percentage at the particular time in respect of the relevant portion, and

in any other case, the initial taxable percentage in respect of the relevant portion.

20. Generally, the taxable percentage in respect of the relevant portion refers to the fraction that the first supplier uses to attribute the consideration for a tour package to the applicable relevant portion of the tour package for purposes of determining the GST/HST payable on that portion of the package.

21. The taxable percentage is either the initial taxable percentage or the base percentage in respect of the relevant portion. In the majority of instances, the taxable percentage in respect of the relevant portion is equal to the initial taxable percentage in respect of the relevant portion, as calculated by the first supplier, when this supplier first determines the amount to be charged for the tour package. In situations where there is a significant change in the cost of acquiring the property and services included in the package, the taxable percentage in respect of the relevant portion is equal to the base percentage.

Further information

22. More information on how to calculate the initial taxable percentage in respect of the relevant portion can be found in paragraphs 23 to 27. More information on how to calculate the base percentage in respect of the relevant portion can be found in paragraphs 28 to 32.

23. The first supplier of a tour package must establish which part of the tour package is the taxable portion and which part is the non-taxable portion.

24. Once the first supplier has determined the taxable portion of the tour package, it calculates the initial taxable percentages for the non-provincially taxable portion of the tour package and/or the provincially taxable portion of the tour package, as the case may be, (i.e., the relevant portion). Calculating the initial taxable percentage in respect of the relevant portion is required only once for any given tour package, that is, at the time the first supplier first determines the amount to be charged for the tour package.

Meaning of initial taxable percentage ss 163(3)

25. The term "initial taxable percentage” in respect of the provincially taxable portion of a tour package or the non-provincially taxable portion of a tour package, as the case may be, (i.e., the relevant portion) means the percentage determined, at the time the first supplier first determines the amount (i.e., the initial price) to be charged by that supplier for a supply of the tour package, by using the formula

A is the part of the initial price that is, at that time, reasonably attributable to the relevant portion; and

B is the initial price.

26. To calculate the initial taxable percentage in respect of the relevant portion, the first supplier divides the part of the initial cost of acquiring the property and services included in the tour package that is reasonably attributable to the relevant portion by the total initial cost of the property and services included in the package. Both amounts are net of input tax credits (ITCs).

The registrant in Example 3 incurred the following costs when acquiring the property and services included in the tour package (net of ITCs) at the time the registrant first determined the amount to be charged for the package:

The initial taxable percentage for each of the relevant portions of the tour package is as follows:

27. As indicated in paragraph 21, in most instances the taxable percentage in respect of the relevant portion is equal to the initial taxable percentage in respect of the relevant portion. Where there is a significant change in the costs of acquiring the property and services included in the tour package, the first supplier may have to use the base percentage to determine the percentage of the consideration that is attributable to the relevant portion.

28. The cost of acquiring the property and services included in a tour package may change between the time that the first supplier first determined the amount to be charged for the package (i.e., when the first supplier determined the initial taxable percentage) and the time when the supply of the tour package is actually made. Generally, the proportion of the costs of acquiring the property and services included in the non-provincially taxable portion of a tour package and/or the provincially taxable portion of a tour package, as the case may be, (i.e., the relevant portion) as a percentage of the cost of all property and services included in the package at a later time is referred to as the base percentage.

Meaning of base percentage ss 163(3)

29. The term “base percentage”, at any time, in respect of the provincially taxable portion of a tour package or the non-provincially taxable portion of a tour package, as the case may be, (i.e., the relevant portion) means the percentage determined by the formula

A is the part of the amount (i.e., the base price) that would be charged by the first supplier of the tour package for a supply at that time of the tour package that is, at that time, reasonably attributable to the relevant portion; and

B is the base price.

30. To calculate the base percentage for the relevant portion at a particular time, the first supplier divides the part of the cost of acquiring the property and services included in the tour package that is reasonably attributable to the relevant portion at that time by the total cost of all property and services included in the tour package at that particular time. Both amounts are net of ITCs.

At the time the registrant in Example 7 supplied the tour package, the cost of acquiring the property and services included in the tour package had changed, as follows:

The initial taxable percentage and base percentage for the relevant portions of the tour package are as follows:

Since the difference between the base and initial taxable percentages in respect of the non-provincially taxable portion of the tour package is not more than 10 percentage points at the time the supply was made, the initial taxable percentage is used as the taxable percentage for purposes of determining the GST payable on the non-provincially taxable portion of the package.

Similarly, since the difference between the base and initial taxable percentages for the provincially taxable portion of the tour package is not more than 10 percentage points, the initial taxable percentage is used as the taxable percentage for purposes of determining the HST payable on the provincially taxable portion of the tour package.

Had the difference between the base and initial taxable percentages for a relevant portion been more than 10 percentage points, then the base percentage would have been used as the taxable percentage for purposes of determining the tax payable on that particular portion of the tour package.

31. In practice, the first supplier does not have to calculate the base percentage in respect of the relevant portion of a tour package if there has not been any change in the cost of acquiring the property and services included in the package since the time the supplier first determined the amount to be charged for the package (i.e., where there is no change in the initial cost of acquiring the property and services included in the tour package).

Adding property/services to a tour package

32. A registrant who takes an existing tour package and adds property and/or services to it in order to assemble a new tour package becomes the first supplier of this new package, if it then supplies the package in Canada. As the first supplier, the registrant must calculate the initial taxable percentage in respect of the relevant portions of the new tour package at the time it first determines the amount to be charged for the supply. The registrant will then have to determine the base percentage in respect of the relevant portions of the new tour package at the time a supply is made (if there has been a change in its costs of acquiring the property and services included in the package) in order to determine which percentage to use as the taxable percentage for purposes of determining the tax payable on the relevant portion.

Consideration for portions of tour package – first supplier para 163(1)(a)

33. When a supply of a tour package is made by the first supplier, the consideration for the supply of the non-provincially taxable portion of the tour package and/or the provincially taxable portion of the tour package, as the case may be, (i.e., the relevant portion) is determined by the formula

A is the taxable percentage in respect of the relevant portion at the time the supply is made; and

B is the total consideration for the entire tour package.

Assume that the registrant in Example 8 is the first supplier of the tour package. The package was sold for $2,724. As discussed in Example 8, the cost of acquiring the property and services included in the tour package changed from the time the registrant first determined the amount to be charged for the package. The difference between the base and initial taxable percentages for each of the relevant portions is not more than 10 percentage points, and therefore the taxable percentage for each relevant portion is equal to the initial taxable percentage for each relevant portion. The consideration for the respective relevant portions is calculated as follows:

The registrant would charge the following amounts with respect to the supply of the tour package:

Consideration for portions of tour package – subsequent supplier para 163(1)(b)

34. When a supply of a tour package is made by a person other than the first supplier (i.e., a subsequent supplier), the consideration for the supply of the relevant portion is determined by the formula

A is the percentage that the consideration for the supply to the subsequent supplier of the relevant portion is of the total consideration paid or payable by the subsequent supplier for the entire tour package; and

B is the total consideration paid or payable to the subsequent supplier for the entire tour package.

The result is that the subsequent supplier uses the same percentage for each portion that the first supplier used.

A subsequent supplier purchased the tour package described in Example 9 for resale to a consumer. The registrant in Example 9 charged, and the subsequent supplier paid, $2,724 for the tour package.

The registrant in Example 9 informed the subsequent supplier that it used the following taxable percentages in respect of the supply of the tour package:

20% for the non-provincially taxable portion; and
80% for the provincially taxable portion.

The subsequent supplier sells the tour package to a consumer for $3,269 and uses the same percentages to determine the consideration for the relevant portion:

The subsequent supplier charges the following amounts with respect to the supply of the tour package to the consumer:

35. The first supplier of a tour package must maintain documentation to show how the taxable percentage of the package was calculated.

36. For information on:

GST/HST rebates for non-residents that purchase tour packages and for non-resident non-registered tour operators that purchase short-term and/or camping accommodation and sold it as part of an eligible tour package, see GST/HST Memorandum 27.3, Foreign Convention and Tour Incentive Program – Rebate for Eligible Tour Packages and Accommodation Supplied as Part of Eligible Tour Packages ;
when a supply is made in or outside Canada, see GST/HST Memorandum 3.3, Place of Supply ; and
when a passenger transportation service would be zero-rated if the service was supplied separately and not as part of a tour package, see GST/HST Memorandum 28.3, Passenger Transportation Services .

37. Pursuant to section 1 of Part VII of Schedule V, most supplies of financial services are exempt. Subsection 123(1) defines financial service to include the issuance of a financial instrument such as an insurance policy.

38. The supply of an insurance policy by an insurer (i.e., generally a person who is licensed under the laws of Canada or a province to carry on an insurance business) to a traveller is generally exempt. This is also the case where a tour operator acts as agent in making a supply of an insurance policy on behalf of an insurer to a traveller (i.e., where the insurance is not included in a tour package). In addition, any commission paid to a tour operator for having acted as an agent in making a supply of an insurance policy on behalf of an insurer is generally exempt.

39. Where a tour operator has purchased an insurance policy from an insurer which provides blanket coverage for all its tours the payment made by the tour operator to the insurer is consideration for an exempt supply. Where the tour operator includes insurance in its tour package, as with the other elements of the tour package, the tour operator must determine the tax status of the insurance as if it had supplied the insurance separately to the purchaser, and not as part of the tour package.

40. Insurance (other than accident and sickness insurance) that is supplied separately by a tour operator to a purchaser is generally taxable at 5% or 13%, and therefore when supplied as part of a tour package, would be included in the taxable portion of the package. Where this is the case, the tour operator would have to determine whether the insurance would be included in the non-provincially or provincially taxable portion of the package.

Accident and sickness insurance

41. The supply of a policy or contract in the nature of accident and sickness insurance is generally exempt regardless of whether the policy is issued, or the contract is entered into, by an insurer or by a person who is not an insurer (e.g., a tour operator). Therefore, accident and sickness insurance included in a tour package would be included in the non-taxable portion of the package.

Combined insurance

42. If the insurance has some exempt (e.g., accident and sickness insurance) and some taxable elements (e.g., trip cancellation insurance, personal property insurance), then the comprehensive travel or trip insurance included in the tour package would be included in the taxable portion of the package.

Enquiries by telephone

Technical enquiries on the GST/HST: 1-800-959-8287

General enquiries on the GST/HST: 1-800-959-5525 (Business Enquiries)

If you are located in Quebec: 1-800-567-4692 (Revenu Québec)

All technical publications on GST/HST are available on the CRA Web site at www.cra.gc.ca/gsthsttech .

View larger image

The taxable portion of a tour package means all property and services included in the package on which the GST/HST would be payable if the property or service were supplied otherwise than as part of a tour package (other than zero-rated supplies of property and services). Generally, the supply of a domestic passenger transportation service is included in the taxable portion of a tour package.

There may be situations where the supply of a domestic passenger transportation service is included in the non-taxable portion of a tour package. This may be the case where a tour operator purchases a domestic passenger transportation service from a registered supplier, and then provides the service to an individual as part of a single supply of a tour package. If the domestic transportation service were supplied separately and not as part of a tour package, the service might be a zero-rated leg of a continuous journey supplied to that individual. Generally, the journey must be an international continuous journey. More information on determining whether a passenger transportation service is a leg of an international continuous journey can be found in Memoranda 28.3, Passenger Transportation Services .

A tour operator may purchase a domestic passenger transportation service that is a leg of an international continuous journey from a registered supplier, on a zero-rated basis, where the tour operator provides the supplier with sufficient documentation such as a certificate of zero-rated entitlement, a tour itinerary and a passenger list. With respect to this documentation:

the tour itinerary must describe all elements of the passenger transportation services (including those provided by the registered supplier) that form the international continuous journey, including the origin, destination, stopovers, arrival and departure dates, and all modes of conveyance; and
the passenger list must contain the names and addresses of the travellers. However, if the supplier agrees, the tour operator can keep the passenger list and provide it on request.

Below is an example of a certificate of zero-rated entitlement that a tour operator may use when purchasing a domestic passenger transportation service that is a leg of an international continuous journey from a supplier.

If presented with a certificate of zero-rated entitlement, a supplier should:

determine if the conditions for zero-rating its transportation services are met. If the conditions are not met, the supplier must charge the GST/HST; and
maintain sufficient documentary evidence that the tour operator resold the services on a zero-rated basis. The supplier will have to decide whether the information provided to it is sufficient because the supplier may be assessed if sufficient documentation has not been maintained.

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GST rates and HSN code for Travel Sets.

Origin Chapter: Chapter 96

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GST Taxability On Tour Operators

Jan 7, 2019 | Uncategorized

Major Source of Income of Tour Operator & Travel Agents:

Commission from Airlines& any mark-up amount from passengers.
Sale Tour Packages, both inbound and outbound
Travel Related Services like Visa, Passport etc.
Hotel Bookings
CAR Rental Services, Travel Insurance
Railway Reservations
AIR TICKET & COMMISSION FROM AIRLINES COMPANIES:
BASICALLY AIR TRAVEL AGENTS DERIVE FOLLOWING TWO TYPE OF INCOME SO AIR TRAVEL AGENT WILL RAISE 2 INVOICES.
Service fees @ 18% on invoice value to passenger: (1st Invoice)
Commission/incentive earning from airlines: (2nd Invoice)

Option A: GST Rate on 18% on Commission on issue of invoice on Airlines Option B: DOMESTIC FAIR:5% of Basic Fair i.e. 0.9 % basic fair (18%*5%)

INTERNATIONAL FAIR:10% of Basic Fair i.e. 1.8 % basic fair (18% *10%)

Note: BASIC FARE means that part of the air fare on which commission is normally paid to the air travel agent by the airline.

PLACE OF SUPPLY

Location of SERVICE RECEIVER
Service Receiver located in India
Service Receiver Registered under GST
Service Receiver Not Registered under GST but his address is available on records
Location of SERVICE PROVIDER
In case service Receiver Not Registered and his address not available

Which Tax to be imposed – IGST/CGST/SGST?

IN CASE OF COMMISSION FROM AIRLINES :
If Location of Airlines in India
If Location of Airlines outside India
SALE OF TOUR PACKAGES (BOTH INBOUND & OUTBOUND):

INBOUND TOURS: Guided tours within India planned by tour operators for the tourist coming from abroad

OUTBOUND TOURS:Guided tours outside India planned by tour operators for Indian tourist going abroad

INBOUND TOURS:
IF TOUR IS ON PRINCIPAL BASIS (DIRECT SERVICES) then
The Place of Supply shall be location of performance of service i.e. In India
Taxable @ 5% without ITC .
IF THE TOUR IS ON COMMISSION BASIS (SUB AGENT/INTERMEDIARY) then
The Place of Supply shall be location of Service Provider i.e.in India
Taxable @ 18% with ITC.
OUTBOUND TOURS:

THE PLACE OF SUPPLY

IN CASE OF PRINCIPAL TO PRINCIPAL TRANSACTION SERVICE RECIPIENT IS:
LOCATION OF SERVICE RECEIVER
Service RecipientLocated in India & registered under GST Law
Service RecipientLocated in India but not registered under GST law but address is available on record
IN CASE WHERE TOUR OPERATOR RECEIVES COMMISSION FROM ANOTHER TOUR OPERATOR SITUATED OUTSIDE INDIA
LOCATION OF SERVICE PROVIDER
Place of Tour Operator i.e. India
OUTBOUND TOUR SOLD TO A FOREIGNER FOR VISITING ANOTHER FOREIGN COUNTRY & THE PAYMENT RECEIVED IN CONVERTIBLE FOREIGN COUNTRY IS EXEMPT FROM GST .

III. TRAVEL RELATED SERVICES LIKE VISA, PASSPORT Etc.

All government fees &transaction charges paid on behalf of the client are not covered under GST Liability .
Service charges charged by the operator on the above services shall be subject to GST @ 18%.
If the service is outsourced from another service provider, GST Paid on agent invoice can be claimed as ITC from output tax paid on the total charges.
COMMISSION ON HOTEL BOOKING:
COMMISSION FROM HOTEL/CRUISE:
Domestic Hotel -LOCATION OF HOTEL.
international hotel-LOCATION OF SERVICE PROVIDER
COMMISSION FROM PASSENGERS:
Service Recipient Located in India & registered under GST Law
Service Recipient Located in India but not registered under GST law but address is available on record
LOCATION OF HOTEL/CRUISE
Service Recipient Located/resident outside India
Car Rental Service, Travel Insurance – GST 5% WITHOUT ITC
Renting of Motor Vehicle shall be – GST 5% WITHOUT ITC or 12% with ITC .

PLACE OF SUPPLY – LOCATION SERVICE RECIPIENT provided recipient is located in India.

GST for travel insurance is 18% but agent are required to register with IRDA as per Insurance act 1938
RAILWAY COMMISSION:
GST for booking for railway is 18%
PLACE OF SUPPLY -LOCATION SERVICE RECIPIENT provided the agent is receiving service charges from customer.

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GST Rates and SAC Codes for Services By Travel Agents

Current GST Rates and SAC Codes for Travel Agents

Traveling is favoured by all some people like to travel domestically and others prefer to travel abroad. But before travelling, everyone used to plan their trip at their convenience, however, sometimes they ignored the other related expenses such as GST rates on services by travel agents and tour operators. It is due to that we are familiar with the GST council has initiated distinct rates for distinct sorts of expenses pertinent to travel.

The blog focuses on what are the compliance required to be followed, what is the process for travel agents and what are the major differences between tour operators and travel agents. We shall learn about the reasons for the variation in the GST rate with the SAC code that they supply before consumers.

Explanation of a Travel Agent

A travel agent organizes travel for end clients (individuals, groups, corporations) on behalf of suppliers (hotels, airlines, vehicle rentals, cruise lines, trains, travel insurance, package tours). His commitment is to ease the process of holiday planning for their consumers and to provide consultancy services and complete travel packages.

Read Also: GST Impact on Hotel and Tourism Industry After Rate Cut

An agent can be self-employed, work for an independent travel agency, or be a member of a travel agency group. Agents usually collect a 10 to 15% commission from lodgings, transportation companies, and interests for handling trip bookings.

Comparison B/W Tour Operators and Travel Agents

Threshold limit of gst registration for tour operators and travel agents:.

Every tour operator with a turnover exceeding Rs. 20 lakhs in the previous financial year should have the GST registration. The maximum turnover is Rs. 10 lakhs for distinct categories or states.

Tour Operators in states:

They should register for GST and file a GST return if their annual turnover is more than Rs 10 lakh.

The turnover limit is not applied every time. For instance, when an individual performing an interstate taxable supply, an individual as an operator or otherwise furnishes the goods or services or both levied to taxes on behalf of another taxable individual like as an air travel agency, should receive GST registration in India .

The Source of Supply Location

E.g.- When a hotel or cruise pays the agent

If the hotel or cruise is situated in India, its point of sale shall be on the location of the hotel or cruise.
The POS of an agent will signify the location of an agent if the hotel or cruise is situated outside of India.

GST Rate Applies on Travel Agents

Travel agents need to levy 18% GST on their commission but, when the agent furnsihes the air transportation services, the GST is levied under Rule 32 of the VGST Rule 2017.

Under CGST Rule 32(3), the value of the services yielded by an air travel agency in association with the booking of airline tickets will be decided at the rate of

Domestic booking:- 5% of the basic fare
International booking:- 10% off the basic fare

GST levied to Air Travel Agent:

A Commission from Airline:

Domestic Air Ticket – GST @18% on 5% of Basic Fare
International Air Ticket – GST @ 18% on 10% of Basic Fare

B Service levied from clients:

GST at the rate of 18% on Service Charge and others.

GST Rate and SAC Code on Travel Agents Services

Closure: The aforesaid explanation signifies that all the services provided to the customers via the travel agents are obligated to taxes under the GST taxation system. It is because you might plan your upcoming vacation budget, and must ensure to include the GST that your travel agent levies you for the services they furnished.

Disclaimer:- "All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check."

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IATO welcomes GST Council’s clarification on GST applicable on tour packages

The GST Council in its 47th meeting concluded in Chandigarh early this week, said that services provided by an Indian tour operator to a foreign resident for a tour partially in India and partially outside India, the tax will be proportionate to the tour conducted in India for such foreign tourists, with the condition that the concession does not exceed half of the tour duration.

Updated On Jul 1, 2022 at 10:32 AM IST

<p>Picture used for representational purposes only.</p>

Published On Jul 1, 2022 at 10:31 AM IST

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SAC 998552 Reservation services for accommodation, cruises and package tours

SAC (Services Accounting Code) code 998552 is classified under group 99855 (Travel arrangement, tour operator and related services) of GST services classification. Group 99855 is classified under heading 9985 (Support services). You can check GST tax rate on 9985, Support services .

Decoding SAC 998552

Gst on reservation services for accommodation, cruises and package tours.

We have filtered GST applicable on Travel arrangement, tour operator and related services including GST on Reservation services for accommodation, cruises and package tours, GST on Support services. You can GST on group Travel arrangement, tour operator and related services by visiting this link.

The HSN CODE FOR Tour operator services is 998555

The full form of HSN Code is Harmonized System of Nomenclature. It was introduced in 1988 by the World Customs Organization (WCO). It is a 6-digit code that separates different products. India has been using HSN codes since 1986 to separate Customs and Central Excise goods. Currently, HSN codes apply to Customs and GST. Codes derived from Customs tariffs are also used for GST purposes.

The current HSN code contains 21 sections. These are divided into 99 chapters divided into 1244 sections. This program helps to make GST easier and more universally accepted. HSN codes for six-digit goods are common worldwide. Standard HSN codes apply to Customs and GST. Codes deducted from Customs tariffs are used for GST purposes. For tax purposes, the HS code is determined by subject (4 HS digits), sub-title (6 HS digits) and tax items (8 digits).

The current HSN Code 998555 relates to Tour operator services .

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GST Rate on Travel Agents & Tour Operator Services in India
GST On Travel Agents and Tour Operators
Complete List Of GST Rates
GST on Tour Operator Services
Explore 2024 GST Rates
GST: Revised rates come into effect from today; Here's what gets

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GST on TOUR & TRAVEL INDUSTRY
GST on Tour & Travel Service
GST Applicability on Tours Travel Agent, Tour Operator or Travel Companies
Impact of GST on Tour, Travel & Hospitality Industry
GST For Travel Agencies
How to Create Attractive Tour Packages?

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GST on Tours and Travels: HSN Code and GST Rate on Travel ...
Depending on whether input tax credits (ITC) are available, there are now two separate rates of GST on tours and travels. Without the option of an ITC, a 5% GST is applied to the gross tour price, while an 18% GST rate is applied with ITC. ... Sale of Tour Packages . 998552: 5%: Service Charge paid on travel-related services like Visa, Passport ...
GST on Tour Operator Services
As per Heading 9985 of GST Tariff Act, 2017, The rate of GST would be 5% (2.5% CGST+2.5% SGST) ... Sir, we are a travel agency offering bungalows, villas, tours packages and various services. What GST we should charge particularly on bungalows, villas, hotels to our client. Is it on the commission, if yes then customers might clearly know the ...
Services Provided by Tour operators & Travel agents
A. Air travel agents are required to pay 18% GST on commission earned from airlines and also service charges, handling charges etc. (by whatever name called) collected from the customers/ passengers. B. Air travel agents can avail ITC on input services to support the output services of travel agents. C.
GST Of Travel Agents and Tour Operator Services
The Second Option. According to CGST Rule 32, an air travel agent can charge 5% on the value of the supply of services relating to booking air tickets. Passage by air charges 10% of the basic fare for domestic and 10% for international bookings. Also Read: Online Business: Advantages and Disadvantages.
GST on Tour Operator & Travel Agents
GST on outbound tour packages being offered to a person based in India charged at the location of service receiver; ... Depending on the situation, the applicable GST rate will either be 12%-18% with Input Tax Credit or 5% without Input Tax Credit. However, for international bookings not within the taxable territory, no GST will be charged. ...
Travel Agent and Tour Operator Services: GST
GST on the Sale of Tour Packages 1. Inbound Tour: India Tour for Foreign travelers If the customer is charged on a principal basis for the inbound tour, 5% GST will be charged without benefit to claim ITC. If the customer is charged on a commission basis for the inbound tour, then 18% GST will be charged with the benefit of claiming ITC. 2.
GST on Tour Operators & Travel Agents
Basically Air travel agents derive following two type of income so air travel agent will raise 2 invoices. 1. Service fees @ 18% on invoice value to passenger. (1 st Invoice) 2. Commission/incentive earning from airlines: (2 nd Invoice) Option A: GST Rate on 18% on Commission on issue of invoice on Airlines.
GST Applicability & Tax Rates on Tourism and Hospitality
18% GST: Air-conditioned restaurants that serve alcohol are taxed at 18%. This higher rate reflects the additional service of serving alcoholic beverages. 3. GST on Tour Operator Services. Tour operators and travel agencies that offer a range of services, from organizing tours to booking travel packages, have specific GST rates:
GST on Travel Industry
From GST perspective, the tour packages can be divided into the following two categories: 1. Inbound Tour - tour of India for foreigner travelers. If the inbound tour fee is charged on Principal basis, GST shall be charged at the rate of 5% without ITC. If the inbound tour fee is charged on Commission basis, GST shall be charged at the rate ...
Tour Operator Under GST
Tour operator under GST return filing @ Rs.1000 per month. GST compliance of tour and travelers. ... GST rate will be 18% on service charges collected from passengers. No commission is paid by the railways, So, no other option rate is applicable in this case. ... Tour Package- inbound & outbound. Inbound Tour Package: Tours organized by the ...
GST On Travel Agents and Tour Operators
For easily enough complete sub-rule, that has been enabled with the airfare for the commission on the normally paid for the air travel agent. GST rate is mainly enabled with the 18% on this Commission. Tour Operator 5%. Agent model 18%. Hotel Sales @18% and 18% GST for availing the input credits.
GST Rate on Travel Agents & Tour Operator Services in India
From GST perspective, the tour packages can be divided into the following two categories: 1. Inbound Tour - tour of India for foreigner travelers. If the inbound tour fee is charged on Principal basis, GST shall be charged at the rate of 5% without ITC. If the inbound tour fee is charged on Commission basis, GST shall be charged at the rate ...
GST Of Travel Agents and Tour Operator Services
Read on to learn the GST rate and its applicability to travel agents and tour operators. 8.9 C. London. Tuesday, April 9, 2024. About us; Contact us; Facebook. Instagram. Twitter. Youtube. News. All Finance ... Tour Package: The tour operator makes the entire booking here, and the total fees charged include his margin.
Calculating the GST/HST on Tour Packages
GST/HST memorandum 27.1 June 2009. Note: This memorandum of Chapter 27 supersedes GST/HST Memorandum 27.1, Zero-Rated Travel Services, dated November 2006. This memorandum explains that suppliers who sell tour packages are required to identify the various elements of the package in order to determine the amount of the goods and services tax/harmonized sales tax (GST/HST), if any, that they ...
GST Applicability & Tax Rates on Travel
The applicable GST rate on these services may vary depending on factors like class, distance, and type of transportation. - Air Travel : Domestic air travel attracts a GST rate of 5% for economy class and 12% for business or first-class. For international travel, GST is levied at 5% on the gross fare. - Rail Travel : GST on railway services varies.
TRAVEL SETS
Rate Revision. 9605. Travel Sets For Personal Toilet, Sewing Or Shoe Or Clothes Cleaning. 18. 0. 01/07/2017. 18%. 960500. Travel Sets For Personal Toilet, Sewing Or Shoe Or Clothes Cleaning.
GST Taxability On Tour Operators
See GST Taxability On Tour Operators, which GST needs to file for the tour and travel operators, read more details on Digital Filings. ... Sale Tour Packages, both inbound and outbound; Travel Related Services like Visa, Passport etc. ... Option A: GST Rate on 18% on Commission on issue of invoice on Airlines Option B:DOMESTIC FAIR:5% of Basic ...
GST Rates and SAC Codes for Services By Travel Agents
GST levied to Air Travel Agent: A Commission from Airline: Domestic Air Ticket - GST @18% on 5% of Basic Fare. International Air Ticket - GST @ 18% on 10% of Basic Fare. B Service levied from clients: GST at the rate of 18% on Service Charge and others.
Tour Operators: IATO welcomes GST Council's clarification on GST
IATO welcomes GST Council's clarification on GST applicable on tour packages. The GST Council in its 47th meeting concluded in Chandigarh early this week, said that services provided by an Indian tour operator to a foreign resident for a tour partially in India and partially outside India, the tax will be proportionate to the tour conducted in India for such foreign tourists, with the ...
GST on Travel Agents & Tour Operators
Being tour operator 5% GST is applicable. My question is, Should we charge IGST or CGST+SGST on our billing to our foreign clients. Moreover, onboard foreigner guest also spends money on the ship for the paid services like the spa (18% GST), laundry (18% GST), paid alcohol (No GST), shopping at the ship boutique (applicable GST rates) etc.
HS code 998552-|Travel arrangement, tour operator and related ...
SAC 998552 Reservation services for accommodation, cruises and package tours. SAC (Services Accounting Code) code 998552 is classified under group 99855 (Travel arrangement, tour operator and related services) of GST services classification. Group 99855 is classified under heading 9985 (Support services). You can check GST tax rate on 9985 ...
GST on tour packages with separate invoices for services / Goods
1. Tax liability under GST for the tour packages, which are providing to guests by way of separate services like accommodation, serving food and beverages, service of authorized guides, trekking accessories etc. against separate invoices. 2. In case where a supply involves supply of both goods and services and the value of such goods and ...
998555 For Tour operator services
The HSN CODE FOR. Tour operator services. is. 998555. The full form of HSN Code is Harmonized System of Nomenclature. It was introduced in 1988 by the World Customs Organization (WCO). It is a 6-digit code that separates different products. India has been using HSN codes since 1986 to separate Customs and Central Excise goods. Currently, HSN ...

GST on Tour Operator & Travel Agents

Business Models for Tour Operators

GST Registration for Tour Operator & Travel Agents

GST Implications on Various Travel Related Services by Agents

GST on Sale of Tour Packages

GST on Travel Related Services like Visa, Passport, etc. by an Agent or Company

GST on Booking of Hotel/Cruise by Agent

GST on Commission of Rail Travel Agents

GST on Rent-a-Cab Service

GSTN launches e-invoice registration services with private IRPs

Travel Agent and Tour Operator Services: GST

Definition:

Chargeable Services of Travel Agents

• Visa Statutory Authorities:

• Visa Facilitation Centres:

GST on the Sale of Tour Packages

1. What is the full form of ITC?

2. What is the meaning of Input Tax Credit?

3. Can air travel agents avail for ITC?

4. Is GST applicable to the cab service providers like Ola, Uber, etc.?

5. Are Cab drivers liable to get registered and pay GST?

6. What if I want to avoid claiming ITC? How much GST do I have to pay?

7. What is SAC? And what is the meaning of it?

8. Why is the SAC code used?

9. Why is it necessary to know the place of supply of the Agent?

10. What is the complete form of the HSN Code?

11. What is the difference between the HSN and SAC codes?

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GST on Travel Agents and Tour Operator Services

About This Plan

All you need to know about Taxation of Travel Industry!

Two Major Business Models of Tour Operators

GST Applicability on Tour Operator Business

GST on Different Types of Income Sources of Tour Operators

Delhi NCR | Bangalore | Kolkata | Ahmedabad | Manali

Tour Operator under GST

Registration limit under Tour Operator under GST​

Further threshold limit of Rs. 20 Lakhs is not applicable in following cases

Activities include in Tour operator under GST

Case-1: Air Travel Agent opts to pay GST on basis fare module​

Case-2: Air Travel Agent opts to pay GST on Commission module

* Input credit at time of service has been received ** due immediately

Commission from Airlines:

GST Return filing Service

There are 2 methods of invoice:

Rent-A-Cab Service

There are 2 methods of invoicing if operator hired cab:

Outbound Tour Package:

Visa & Passport Assistance

Hotel Booking Services

Methods of invoicing

Place of supply:

GST Return filing Services

Travel Insurance Services

Other Services

E-Tax Guru, Vivek Vihar, Phase-2, Delhi-110095, India

GST Rate on Travel Agents & Tour Operator Services in India

GST on Different Types of Income Sources for a Travel Agent/Company

GST on Air Ticket Booking Services by Agents

GST on the Sale of Tour Packages

GST on Travel Related Services like Visa, Passport, etc. by an Agent or Company

GST on Booking of Hotel/Cruise by Agent

GST on Commission of Rail Travel Agents

GST on Rent-a-Cab Service

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What is Meant by Tour Operator?

Business Models – Tour Operators

Tour Package:

Pure Agent Tour Operator:

Flight and Hotel Booking with Backend Commission

GST Registration Requirements

Taxable inter-state supply by a person

Travel Agents Outward Supply – SAC Codes

How is GST Calculated on These Items?

The First Option

The Second Option

Is IGST or CGST/SGST to be Imposed?

Commission on Hotel Bookings

Registration limit under Tour Operator under GST

Case-1: Air Travel Agent opts to pay GST on basis fare module