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2019

Key points for Tour Operators & Travel Agents Registered under GST

Key points for Tour Operators Travel Agents Registered under GST

Major Source of Income of Tour Operator & Travel Agents:

  1. Commission from Airlines’ & any mark up amount from passengers.
  2. Sale Tour Packages, both inbound and outbound.
  3. Travel Related Services like Visa, Passport etc.
  4. Commission from Hotel / Cruise.
  5. CAR Rental Services, Travel Insurance.
  6. Railway Reservations.


1. Air Ticket & Commission from Airlines Companies:

  • 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%)
    • Here basic fare means that part of the air fare on which commission is normally paid to the air travel agent by the airline.

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

  • Service receiver located in India & registered under GST: Location of service Receiver.
  • Service Receiver located in India but not registered under GST but his address is available on records: Location of Service Receiver.
  • In case service Receiver address not available: Location of Service Provider.

 

Location of Supplier Address of Service Receiver Travel Place Place of Supply as per GST Tax Applicable
Gujarat Gujarat India Gujarat CGST+SGST
Gujarat Gujarat Outside India Gujarat CGST+SGST
Gujarat Maharashtra India Maharashtra IGST
Gujarat Maharashtra Outside India Maharashtra IGST
Gujarat Outside India Outside India Outside India NO GST
Gujarat Outside India India Outside India Export of Service

  • In Case of commission from Airlines:

 

Location of Airlines in India Location of Service recipient
Location of Airlines outside India Location of service Provider

Location of Supplier Location of Airlines Place of Supply for ATA Tax Applicable
Gujarat Gujarat Gujarat CGST+SGST
Gujarat Maharashtra Maharashtra IGST
Gujarat London Gujarat CGST+IGST

 

2. Sale of Tour Packages (Both Inbound & Outbound):

  • Inbound Tours: Tours organized by the Tour Operator, within India for the tourist coming from abroad is generally known as inbound tours.
  • Outbound Tours: Tours organized by the Tour Operator, outside India, for the tourist going abroad is generally known as outbound tour.

Inbound Tours:

  • If tour is on Principal basis then the place of supply shall be location of performance of service i.e. in India & Taxable @ 5% without ITC.
  • However if the tour is on Commission basis then place of supply shall be location of Service Provider i.e.in India but taxable @ 18% with ITC.

 

Outbound Tours:

  • The place of supply in case of principal to principal transaction is when service recipient is:
    • Located in India & registered under GST Law – Location of service receiver.
    • Located in India but not registered under GST law but address is available on record – Location of Service receiver.
  • The place of supply in case where tour operator receives commission from another tour operator situated outside India shall be 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.

 

3. Travel Related Service like VISA, Passport etc:

  • All govt fees & consular charges paid on behalf of the consumer/client are outside the preview of GST.
  • Service charge on the above service 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 & difference amount can be paid to govt.

 

4. Commission from Hotel / Cruise:

  • In case of domestic hotel then place of supply shall be location of hotel.
  • In Case it is international hotel booking then the place of supply shall be location of service provider.
Location of Supplier Location of Hotel / Cruise Place of Supply for travel agent Tax Applicable
Gujarat Gujarat Gujarat CGST+SGST
Gujarat Maharashtra Maharashtra IGST
Gujarat London Gujarat CGST+SGST

 

Commission from Passengers: When Service Recipient:

  • Located in India & registered under GST Law: Location of Service Recipient.
  • Located in India but not registered under GST law but address is available on records : Location of Service recipient.
  • Located out of India: Location of Hotel/cruises.



Location of Agent Location of Pax Location of Hotel/Cruise Place of Supply for Agent Tax Applicable
 Gujarat Gujarat  Maharashtra Gujarat   CGST+SGST
 Gujarat Maharashtra Rajasthan   Maharashtra  IGST
 Gujarat London  Rajasthan  Rajasthan  IGST
 Gujarat Maharashtra  USA  Maharashtra  IGST

5. Car Rental Service, Travel Insurance:

  • GST Will be 5% without ITC.
  • GST applicable for renting of motor vehicle shall be @ 5% with no ITC or 12% with ITC.
  • If the service provided to a person located in India then the place of supply shall be the location service recipient.
  • GST for travel insurance is 18% but agent are required to register with IRDA as per Insurance act 1938.

 

6. Railway Commission:

  • GST for booking for railway is 18%.
  • Where the agent is receiving service charges the place of supply shall be location of receipt ant of service.

 

>> Foreign Exchange:

The following option for determining value of supply for a person providing service in relation to purchase or sale of foreign currency & money changing:

Option A:

When any currency is exchanged from or to Indian Rupees  Value shall be difference between the Buying or selling rate and RBI reference rate, multiplied by total units of currency 
 If in relation to the above case, RBI reference rate is not available Value shall be 1% of gross amount of INR provided or received by the person changing the money 
 If neither of the currencies exchanged in INR  Value shall be 1% of lesser of two amounts by converting any of the two currencies into INR

Option B:

Gross Amount of currency exchanged Value to be considered for supply of Service
Up to Rs.1,00,000 1% of Gross amount of currency Exchanged, Subject to Minimum amount of Rs. 250.
Exceeding Rs.1 Lakhs but less than 10 Lakhs Rs. 1,000 + 0.5% of Gross amount of currency Exchanged
Exceeding Rs.10 Lakhs Rs. 5,000 + 0.1% of Gross amount of currency Exchanged, Subject to Maximum amount of Rs. 60,000

 

Other Misc Services:

  • Services by way of entrance to museum, national park, wildlife sanctuary, tiger reserve or zoo are fully exempted from GST.
  • Entrance fee for entry into Govt monuments are not specifically exempted. However service provided by central Govt, State, union territory or local authority are exempted if the consideration for such services does not cross Rs.5,000/-.
  • As per Notification No.47/2017 GST, Services by way of admission to a protected monument so declared under the Ancient Monuments and Archaeological Sites and Remains Act 1958 (24 of 1958) or any of the State Acts, for the time being in force are exempted from GST.
  • Services by the way of admission to amusement parks including theme parks, water parks, joy rides like camel ride, elephant ride, horse ride, jeep safari, merry go rounds, go carting & ballet will attract 18% GST from 25th January 2018 via notification no.01/2018.However the benefits of ITC will not be available to tour operator paying 5% GST.
  • Other Services such as portal services, guide services etc attract 18% GST.
  • Service by a specified organization in respect of religious pilgrimage facilitated by the ministry of external affairs of the govt of India under bilateral agreement is exempt from GST.

 

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