GST on Tour Operators & Travel Agency Services

A travel business rarely sells just one thing. Packaged tours, air tickets, hotel bookings, rail tickets, and visa help each carry their own GST rate, ITC rules, and billing logic. Here's a practical guide to all five.

By ANTM & Associates, Chartered Accountants

Two of the headline rate changes proposed for Tax Year 2026-27.

Two Ideas That Run Through Everything

Before the service-by-service detail, two concepts appear again and again across travel-agency billing. Get these once, and the rest falls into place.

1. Which tax — CGST + SGST, or IGST?

Every taxable supply is either intra-state or inter-state. The rule is simple:

Example: a Gujarat agent serving a Gujarat client charges CGST + SGST; serving a Rajasthan client, IGST.

2. "Pure agent" vs not

Where an agent bills as a pure agent, GST is charged only on the service charge / commission — the pass-through cost (the ticket, the room) is excluded. Where the agent bills not as a pure agent, GST is charged on the total value of the bill. This single choice changes the taxable value dramatically.

Who Is a "Tour Operator"?

A tour operator is a person engaged in planning, scheduling, organising, or arranging tours — including arrangements for accommodation, sightseeing, or other similar services — by any mode of transport.

The Five Services — Pick Yours

Select a service to see its GST rate, taxable value, SAC code, input tax credit position, and place of supply.

Tour Operator

Option A — with IT

CGST - rate 18% on total value of the bill

SAC - 99855

ITC - Available on input goods, services and capital goods.

Option B — concessional

GST - rate 5% on total value of the bill

SAC - 99855

ITC - Without ITC of goods & services — but ITC of the tour operator bill (from another operator) can still be taken.

Place of supply

Domestic tour - Based on the location of performance of the service — same state as provider → CGST + SGST; other states → IGST.

Foreign traveller - Tour conducted outside India → not taxable. Inbound tour (coming to India) → place of supply is the recipient's location if registered, or where the journey starts if unregistered.

Air Travel Agent

Invoice to Airline (commission)

Option A — actual commission

GST rate - 18% on actual commission

GST - valueCommission × 18 / 118

ITC - No restriction — available on input goods, services and capital goods.

Option B — deemed value

GST rate - 18% on deemed value

Deemed value - Domestic airline: 5% of basic fare. International airline: 10% of basic fare.

ITC - No restriction — available.

Invoice to Customer

As a pure agent

GST rate - 18% only on service charges

SAC - 998551

ITC - No restriction — available.

Not as a pure agent

GST rate - 18% on total value of the bill

SAC - 998551

ITC - No restriction — available.

Lock-in on the commission option

Basic fare means the air fare on which commission is paid to the agent. Once an option is chosen, it cannot be withdrawn for the remaining part of the year.

Hotel Booking

Invoice to Customer

GST rate - 18% only on service charges

SAC - 998552

ITC - No restriction — available.

Place of supply - Location of the service recipient (same state → CGST + SGST; other state → IGST).

Commission from Hotel

GST rate - 18% only on commission income

GST value - Commission × 18 / 118

SAC - 998552

ITC - No restriction — available.

Commission from Hotel

GST rate - 18% only on commission income

GST value - Commission × 18 / 118

SAC - 998552

ITC - No restriction — available.

Rail Ticket Agent

Invoice to Customer

As a pure agent

GST rate - 18% only on service charges

SAC - 998551

ITC - No restriction — available.

Place of supply - Location of the service recipient (same state → CGST + SGST; other state → IGST).

Not as a pure agent

GST rate - 18% on total value of the bill

SAC - 998551

ITC - No restriction — available.

Visa & Passport

Visa & Passport Assistance

GST rate - 18% on the service (billed as a pure agent)

SAC - 998559

ITC - No restriction — available on input goods, services and capital goods.

Place of supply - Location of the service recipient (same state → CGST + SGST; other state → IGST).

Indicative summary of the positions in ANTM & Associates' study. Rate options, valuation, and place-of-supply outcomes depend on the exact facts and the option exercised. Please confirm on your specific case before relying on this.

Disclaimer: For general information and educational purposes only, and not professional advice. GST rates, valuation options, and place-of-supply positions depend on specific facts and are based on the law as on date. Please consult a qualified professional before acting.