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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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.
GST Rate for Travel Agency Services in India
| 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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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 (FAQs)
- 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.
