GST on Travel Arrangement and Tour Operator Services

Tour Operator Services

“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.

Tour operator services are subject to GST of 5%, subject to the following conditions -

1. Input tax credit of goods and services is not available, other than the input tax credit of the input service in the same line of business (i.e., tour operator service procured from another tour operator).

2. The bill issued for the supply of this service indicates that it is inclusive of charges of accommodation and transportation required for such a tour and the amount charged in the bill is the gross amount charged for such a tour including the charges of accommodation and transportation required for such a tour.

Hotel Booking

If hotel charges are recovered separately, then GST at the rate of 18% on service charge otherwise 5% on the total value (i.e., hotel charges and service charges).

Service of booking of Air Travel Tickets

GST shall be charged at the rate of 18% on service charge/ commission if air ticket charges are recovered separately.

If the air travel agent does not indicate service charge/ commission separately, GST shall be charged at the rate of 18% on the value of supply of services as calculated below -

1. In case of domestic bookings = 5% of the basic fare

2. In case of international bookings = 10% of the basic fare

“Basic fare” means that part of the airfare on which commission is normally paid to the air travel agent by the airline.

Place of Supply

Importance of place of supply

GST is a designation-based tax, and the place of supply is important to determine the nature of the transaction (i.e., intrastate and intestate) accordingly CGST and SGST or IGST shall be charged in the Invoice.

1. The place of supply of services by way of lodging accommodation by a hotel, inn, guest house, homestay, club, or campsite including a houseboat or other vessel –

Shall be the location at which the immovable property or boat or vessel is located.

2. In case of hotel, inn, guest house, homestay, club, or campsite including a houseboat or other vessel is located outside India, but recipient and provider of service located in India, place of supply of services - Shall be the location of recipient.

3. The place of supply of passenger transportation service to a registered person –

Shall be the location of the recipient

4. The place of supply of passenger transportation service to an unregistered person –

Shall be the place where the passenger embarks on the conveyance.

(Note - return journey shall be considered a separate journey)

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