GST for Tours and Travel Services in India
Tourism is one of India’s fastest-growing sectors, offering everything from luxury holiday packages to local sightseeing tours. If you run a travel business or book travel services, understanding the gst for tours and travels is key to pricing and compliance.
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GST Applicability on Tour and Travel Services
All tour operators, travel agents, and agencies providing services like:
- Holiday packages
- Sightseeing tours
- Hotel and flight bookings
- Car rentals with a driver
are required to register under GST if their turnover exceeds ₹20 lakhs (₹10 lakhs for special category states).
GST Rate for Tours and Travels
| Service Type | SAC Code | GST Rate |
|---|---|---|
| Domestic tour packages (all-inclusive) | 9985 | 5% (No ITC) |
| International tour packages | 9985 | 5% (No ITC) |
| Hotel bookings (on behalf of customer) | 9963 | 18% |
| Air ticket booking (commission-based) | 9985 | 18% |
| Car rental with driver | 9966 | 5% / 12% |
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GST for Tour Packages: Domestic vs International
Domestic Tour Packages:
- GST @ 5% on the total package value
- No ITC allowed (as per Rule 32 of CGST Rules)
- Applies to packages that include stay, transport, food, and activities
International Tour Packages:
- Even though services are partly outside India, GST @ 5% is charged on the total value
- Foreign exchange earnings are not exempt from GST
Billing and Invoicing for Tour Operators
- Mention correct SAC code 9985 on invoices
- Apply 5% GST without ITC, or opt for 18% GST with ITC
- File regular GSTR-1 and GSTR-3B
- Maintain clear breakup of package components for transparency
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GST on Air and Hotel Bookings
- GST is charged only on your commission as an agent
- Airline or hotel GST is billed by the provider
- You charge 18% GST on the service or convenience fee
Input Tax Credit (ITC) Rules
| Item | ITC Allowed? |
|---|---|
| Hotel, travel, and dining costs for package | ❌ No (if under 5%) |
| Office rent, equipment, ads | ✅ Yes (if GST @18%) |
| Services resold without bundling | ✅ Yes |
Conclusion
Whether you’re planning a trip or running a travel agency, understanding the GST for tours and travels helps with pricing transparency and ensures your business remains GST-compliant.
I am a Chartered Accountant with 5 years of experience specializing in GST, income tax, and HSN code classification. I help businesses with GST compliance, tax planning, and financial advisory, ensuring they meet regulatory requirements while optimizing their tax strategies. I aim to simplify GST filings, income tax laws, and HSN code classifications, helping professionals and business owners stay informed and compliant.
Frequently Asked Questions (FAQs)
- What is the GST for tours and travels in India?5% GST applies on tour packages without ITC. If services are itemized, rates vary from 5% to 18%.
- What is the GST for tour packages that include hotels and transport?GST is 5% on the total package if offered as a bundled service.
- Can travel agents claim ITC on tour package costs?Not if they charge 5% GST. ITC is only allowed under the 18% scheme.
- Are international tours also taxed under GST?Yes. GST @5% applies on international tour packages offered from India.
- Is GST charged on air tickets booked through agents?Yes. Agents charge 18% GST on their service fee, not the ticket price.
