---
title: "New GST for Tours and Travels 2026: 5% Rate on Tour"
description: "New GST rate on tours and travels in 2026 is 5% on all tour packages and travel services. Stay GST-compliant with Busy and apply the correct rate automatically."
canonical: "https://busy.in/gst-rates/tours-travels/"
author: "Apurva Maheshwari"
published: "2025-05-16T06:24:29.000Z"
category: "GST Rates"
---

-   The new GST rates for tours and travel services in India, effective from September 22, 2025, are 5% for domestic and international tour packages without ITC.
-   Hotel bookings and air ticket booking commissions are taxed at 18% GST, while car rentals with a driver can be taxed at 5% or 18% depending on ITC eligibility.
-   Travel businesses must register for GST if their turnover exceeds ₹20 lakhs, or ₹10 lakhs in special category states.
-   Tour packages, whether domestic or international, are taxed at 5% GST on the total package value, but no ITC is allowed under this rate.
-   GST on air and hotel bookings is charged on the agent's commission at 18%, not on the ticket or room price.

# 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.

## 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**](https://busy.in/gst/gst-returns/) .

## About the author

**Apurva Maheshwari**

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

### 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.

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