New 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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New GST Rate on Tours & Travel Services in India
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for common tours and travel services (no compensation cess).
| Service Type | SAC Code | New GST Rate |
|---|---|---|
| Domestic tour packages (all-inclusive) | 9985 | 5% (No ITC) |
| International tour packages | 9985 | 5% (No ITC) |
| Hotel bookings on behalf of customer (agent commission) | 9985 | 18% |
| Air ticket booking (agent commission / service charge) | 9985 | 18% |
| Car rental with driver | 9966 | 5% (restricted ITC) or 18% (with ITC) |
Notes: (i) “Specified premises” catering/hotel supplies remain at 18% with ITC; otherwise hotel rooms ≤ ₹7,500/night are 5% without ITC. (ii) For air travel agents, 18% applies on the deemed commission value per special valuation; airlines’ own ticket GST follows passenger transport rules.
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).
Old GST Rate for Tours and Travels
(Old GST Rates – Applicable Until 21st September)
| 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.
