What is the GST rate for travel agency services in India?

5% for full tour packages (no ITC) 18% for service commissions and consultancy (ITC allowed)

Is GST applicable on flight or hotel booking through agencies?

Yes, the commission earned by the agency is taxed at 18% .

Can travel agents claim input tax credit?

Only if they're charging 18% GST on services. No ITC for 5% packaged tours .

What SAC code is used for travel agency services?

Mostly 9985 (support services) and 9983 (consultancy/advisory).

Is GST registration required for small travel agents?

Yes, if their turnover exceeds ₹20 lakh , or if they offer interstate/online services , GST registration is mandatory.

New GST Rate for Travel Agency Services in India

With more people exploring domestic and international travel, the role of travel agencies has expanded—from booking flights and hotels to offering complete tour packages. But what about the tax side? If you’re running or using the services of a travel agency, understanding the GST rate for travel agency services is a must. This blog covers applicable GST rates, ITC eligibility, and key compliance rules for the travel industry in India.

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GST Rates

Is GST Applicable to Travel Agencies?

Yes. Travel agencies are taxable service providers under GST . Whether you’re booking tickets, providing hotel bookings, or offering a full tour package, you must charge GST on your services.

Most travel services fall under SAC Code 9985 – Support services for transportation and SAC Code 9983 – Other professional, technical and business services.

New GST Rate on Travel Agency Services in India

The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for travel agency–related services (no compensation cess).

Service Provided by Travel Agency	New GST Rate	ITC Allowed?	SAC Code
Tour packages (domestic or international)	5%	No	9985
Commission on airline ticket booking	18%	Yes	9985
Hotel booking on behalf of clients	18%	Yes	9985
Travel planning/consultancy	18%	Yes	9983
Rent-a-cab service (not owning vehicle)	5% or 18%	Depends	9966

Old GST Rate for Travel Agency Services in India

(Old GST Rates – Applicable Until 21st September)

Service Provided by Travel Agency	GST Rate	ITC Allowed?	SAC Code
Tour packages (domestic or international)	5%	No	9985
Commission on airline ticket booking	18%	Yes	9985
Hotel booking on behalf of clients	18%	Yes	9985
Travel planning/consultancy	18%	Yes	9983
Rent-a-cab service (not owning vehicle)	5% or 12%	Depends	9966

GST on Tour Packages

If you offer all-inclusive packages (transport, stay, sightseeing):

GST charged = 5% on total package value
You cannot claim Input Tax Credit on hotel or transport bookings made for the client

This helps keep packages affordable, but limits credit recovery for the agency.

GST on Commission-Based Services

If your agency earns commission on airline bookings, hotel bookings, or ticketing, then you must charge 18% GST on the commission—not the full booking value. In such cases, you can also claim ITC on eligible business expenses.

Input Tax Credit (ITC) Rules for Travel Agencies

Scenario	ITC Eligibility
Tour package billed at 5% GST	Not allowed
Commission services at 18% GST	Allowed
Marketing, software, office rent, staff salaries	Allowed (if 18% GST billed)

Only agencies charging 18% GST can claim ITC . Those operating under the 5% slab for tour packages cannot.

Understanding the gst rate for travel agency services is essential for tour operators and agents who want to stay compliant, price accurately, and optimize their tax liability. Whether you’re building personalized trips or just booking tickets, correct GST application ensures smooth business operations.

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Susheel Kumar

Chartered Accountant

MRN No.: 096252

City: Delhi

I am a Chartered Accountant with over 20 years of experience and a finance content writer. I focus on educating people about finance and taxation. I have written many blog posts on finance, taxation, trading, and investment on the BUSY website. My goal is to increase financial understanding by making complex concepts easier to grasp and to support educational programs in India.

Frequently Asked Questions

What is the GST rate for travel agency services in India?
- 5% for full tour packages (no ITC)
- 18% for service commissions and consultancy (ITC allowed)
Is GST applicable on flight or hotel booking through agencies?

Yes, the commission earned by the agency is taxed at 18%.
Can travel agents claim input tax credit?

Only if they're charging 18% GST on services. No ITC for 5% packaged tours.
What SAC code is used for travel agency services?

Mostly 9985 (support services) and 9983 (consultancy/advisory).
Is GST registration required for small travel agents?

Yes, if their turnover exceeds ₹20 lakh, or if they offer interstate/online services, GST registration is mandatory.

View all FAQs