GST ON TRAVEL AGENCY Service

Nowadays Travel Agency Service is very common and will be available in every city or even in small towns and also will be easily visible in the websites with discounts and all. Generally those who are in this business clubs together with other services like tour operator, Rent-A-Cab Service, Hotel Booking, Visa Processing Service, Foreign Exchange Service etc. So, in the following paragraphs various issues related to this Service will be dealt and will be continuously updated as soon as the Board of Central Goods and Services Tax, New Delhi updated.

Definition:- Any person engaged in providing any service related to the booking of travel by air domestically or Internationally.

SAC Code (Service Accounting Code) :

1.    Reservation Services for Transportation : 998551

2.    Reservation Services for accommodation, Cruises and Package tours : 998552

3.    Reservation Services for Convention Centres, Congress Centres and Exhibition halls :998553

4.    Reservation Services for event tickets, Cinema Halls, Entertainment and Recreational Services and other related reservation services : 998554

5.    Tour Operator Services :998555

6.    Tourist Guide Services : 998556

7.    Tourism promotion and visitor information services : 998557

8.    Other travel arrangement and related Services : 998559

Liability of GST on Travel Agency Service: As per section 22 to 25, any person who is engaged in supply of goods or rendering of services or both will be liable to be registered under GST if,

1.   Aggregate turnover in a financial year of taxable supply of Goods or Services exceeds Rs. 20 Lakhs or,

2.   Aggregate turnover in a financial year of taxable supply of goods or services exceeds Rs. 10 lakhs if the person is located at North Eastern States of India (including Assam, Meghalaya, Manipur, Mizoram,Nagaland, Arunachal Pradesh, Tripura and Sikkim) and states of Himachal Pradesh, Uttarankhand and Jammu & Kashmir.

Rate of GST rate : As per rule 6(3) of the Determination of value of supply,

“ the value of supply of services in relation to booking of tickets for travel by air provided by an air travel agent, shall be deemed to be an amount calculated at the rate of 5%  of the basic fare in the case of domestic bookings, and at the rate of 10% of the base fare in the case of International bookings of passage for travel by air.”

Explanation : For the purpose of this sub-rule, the expression “base fare” means that part of the air fare on which commission is normally paid to the air travel agent by the airlines.

Eligibility of ITC (Input Tax Credit) : No ITC

Rate of GST for related Services :

Nature of Services	Rate of GST
Renting of Motor Cab or Rent-A-Cab ( if the fuel cost is borne by the Service Recipient, the 18% GST will be liable).	5% with NO ITC
Transport of passengers by (1) Air-Conditioned Contract Carriage/Stage Carriage other than motor cab and (2) a Radio Taxi.	5% with NO ITC
Transport of Passengers by Air in Economy Class	5% with ITC of related input Services.
Transport of Passengers, with or without accompanied belongings, by air, embarking from or terminating in regional connectivity scheme Airport.	5% with ITC of related input Services.
Tour Operator Service	5% with NO ITC
Transport of Passengers by air other than economy class	12% with ITC of related input Services.
Renting of Hotels, Inns, Guest Houses, Clubs, campsites or other Commercial places meant for residential or lodging purposes having room tariff Rs.1000 and above but less than Rs. 2500 per room per day.	12% with ITC of related input Services.
Renting of Hotels, Inns, Guest Houses, Clubs, campsites or other Commercial places meant for residential or lodging purposes having room tariff Rs.2500 and above but less than Rs. 5000 per room per day.	18% with ITC of related input Services.
Accommodation in hotels including 5 Star and above rated hotels, Inns, Guest Houses, Clubs, campsites or other Commercial places meant for residential or lodging purposes having room tariff is Rs.5000 and above per room per day.	28% with ITC of related input Services.

For Tour Operator CLICK HERE.

For SAC Code numbers of other Services CLICK HERE.