{"id":80198,"date":"2025-11-05T19:07:49","date_gmt":"2025-11-05T13:37:49","guid":{"rendered":"https:\/\/piceapp.com\/blogs\/?p=80198"},"modified":"2025-11-05T19:07:55","modified_gmt":"2025-11-05T13:37:55","slug":"tours-and-travels-gst-rate","status":"publish","type":"post","link":"https:\/\/piceapp.com\/blogs\/tours-and-travels-gst-rate\/","title":{"rendered":"Tours and Travels GST Rate: ITC, Rules & Guide"},"content":{"rendered":"\n
The tours and travels GST rate<\/strong> is now decided based on the availability of input tax credits (ITC). If a tour operator decides not to claim ITC, then a 5% GST is levied on their gross tour expenses.<\/p>\n\n\n\n Whereas, for those opting for ITC, the Government applies an 18% GST rate. These different GST rates have a significant impact on the tariffs sent to the travellers.\u00a0<\/p>\n\n\n\n To learn more about how the supply values are calculated while determining the GST for tour packages<\/strong>, continue reading. <\/p>\n\n\n\n The Goods and Services Tax (GST) Act allows tour operators in India three distinct ways to legally operate their business and claim ITC. Under GST, the input tax credit is normally the taxation amount that companies may deduct from their overall due tax upon purchasing supplies for the furtherance of business. <\/p>\n\n\n\n Here\u2019s how you can run a business as a tour operator in India:<\/p>\n\n\n\n Note<\/strong>: Any tour operator with an annual turnover exceeding \u20b920 lakh (\u20b910 lakh for special category states) must register for GST.<\/p>\n\n\n\n According to Heading 9985 of the GST Tariff Act, a company can charge a 5% tours and travels GST rate<\/strong> on services upon meeting the following conditions:<\/p>\n\n\n\n The tour operator cannot claim ITC on services such as air ticket, hotel booking, etc. However, they can still claim ITC on services taken from another travel company. <\/p>\n\n\n\n It is mandatory to declare that the charged amount is the total or gross amount in the tour operator\u2019s invoice. The invoice should show all the charges for transportation and accommodation. <\/p>\n\n\n\n Below, you see a tabular list of service-related GST for tour packages <\/strong>along with SAC codes for some core services: <\/p>\n\n\n\n When a travel company functions like a pure agent, it can easily eliminate the costs incurred by another service provider from the overall value of its taxable supply. It will facilitate more precise tax calculation and make sure that the government collects tax from the rightful entity, in this case, the pure agent. <\/p>\n\n\n\n Starting October 1, 2023, companies selling overseas tour packages were required to collect a 5% Tax Collected at Source (TCS) on payments up to \u20b97 lakh per individual annually, and a hefty 20% on any amounts exceeding that.<\/p>\n\n\n\n It is a crucial reform for agents charging GST on international tour packages, <\/strong>as following this new rule will help them stay compliant, steer clear of penalties and keep customers well-informed about any extra costs. <\/p>\n\n\n\n In general, while making hotel bookings, the place of supply is automatically the location where the accommodation is situated. Similarly, for flights, the place of supply is the location of departure. If a company is not officially GST-registered in the state from which the plane is departing, it cannot claim ITC on its invoice. <\/p>\n\n\n\n The determination of the time of supply, much like the value of supply, is dependent on whether a tour service provider is operating as a pure agent.<\/p>\n\n\n\n If the company is not working as a pure agent, its customers will have to pay the GST amount while making payments or at the time the invoice is raised, whichever happens first. During these situations, the GST for tours and travels <\/strong>is recognised on a payment basis. <\/p>\n\n\n\n On the other hand, if a pure agent is involved, the GST component is added while making the final invoice or receiving the commission, whichever occurs first. <\/p>\n\n\n\n Suppose you own a tour agency and you decide to charge an 18% GST rate on the gross invoice amount. Then, you can claim input tax credit on different services like professional fees, rent, telephone, etc. <\/p>\n\n\n\n In the pointers below, you will find more information regarding ITC availability on GST for tour packages<\/strong>:<\/p>\n\n\n\n Take a look at the following table to find out the key differences between tour operators and travel agents and determine the GST implications:<\/p>\n\n\n\n When applying GST rates to tours and travel services, it is important to understand how different components are taxed. Here are a few key pointers that one must note in this case:<\/p>\n\n\n\n Charging the correct GST rate and claiming ITC on eligible purchases can have a huge impact on your tour package pricing and profitability. If you are unsure about the tours and travels GST rate<\/strong>, you can refer to the table provided above. <\/p>\n\n\n\n However, if there emerges a complexity due to the multiple sources of income involved, you can consult a GST expert online for the most optimal solution.\u00a0<\/p>\n\n\n\nScope of GST for Tours and Travels<\/strong><\/h2>\n\n\n\n

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GST Rates and SAC Codes for Various Tour and Travel Services<\/strong><\/h2>\n\n\n\n
Service Description<\/strong><\/th> SAC<\/strong><\/th> GST Rate<\/strong><\/th><\/tr> Services provided to a foreign tourist by an Indian tour operator related to a travel package involving places outside India<\/strong><\/th> 9985<\/strong><\/th> 0% (Nil)<\/strong><\/th><\/tr> Sale of tour packages<\/strong><\/th> 998552<\/strong><\/th> 5%<\/strong><\/th><\/tr> Air ticket booking service through agents<\/strong><\/th> 998551<\/strong><\/th> 18%<\/strong><\/th><\/tr> Service charge applicable on tour services, such as Passport issuance, Visa, etc.<\/strong>\u00a0<\/th> 998555<\/strong><\/th> 18%<\/strong><\/th><\/tr> Rail travel agent commission\u00a0<\/strong><\/th> 9967<\/strong><\/th> 18%<\/strong><\/th><\/tr> Cruise\/ hotel booking by a travel agent<\/strong><\/th> 998552<\/strong><\/th> Varies between 2% – 18% when ITC is claimed. Otherwise, it is 5%.\u00a0<\/strong><\/th><\/tr> Cab rental service<\/strong><\/th> 9967<\/strong><\/th> 5%<\/strong><\/th><\/tr> Other rental services<\/strong><\/th> 998559<\/strong><\/th> 18%<\/strong><\/th><\/tr><\/tbody><\/table><\/figure>\n\n\n\n Determining the Value of Supply for GST on Tours and Travels<\/strong><\/h3>\n\n\n\n
How to Determine the Place of Supply for a Tour Company?<\/strong><\/h2>\n\n\n\n

When Does GST Apply to Tours and Travels?<\/strong><\/h2>\n\n\n\n
Can You Claim on GST for Tours and Travels?<\/strong><\/h2>\n\n\n\n
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What is the Difference Between Tour Operators and Travel Agents?<\/strong><\/h2>\n\n\n\n

Parameters<\/strong><\/th> Tour Operator<\/strong><\/th> Travel Agent<\/strong><\/th><\/tr> Meaning<\/strong><\/th> A tour operator is a company or individual responsible for planning and managing holiday packages.<\/strong><\/th> A travel agent is an intermediary or agency that sells vacation packages and travel services on behalf of tour operators.<\/strong><\/th><\/tr> Purpose<\/strong><\/th> They arrange travel services.<\/strong><\/th> Travel agents purchase the ready-made holiday packages and offer them to travellers.<\/strong><\/th><\/tr> Service<\/strong><\/th> They make sure everything in the holiday package runs smoothly once it is booked.<\/strong><\/th> They help you choose the right holiday and handle the booking based on what you are looking for.<\/strong><\/th><\/tr><\/tbody><\/table><\/figure>\n\n\n\n Key Points to Note While the Applying Tours and Travels GST Rate<\/strong><\/h3>\n\n\n\n
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Conclusion<\/strong><\/h2>\n\n\n\n