New GST Rate for Travel Agency Services in India
- Travel agencies in India must charge GST on services like ticket booking, hotel reservations, and tour packages.
- The new GST rate for tour packages is 5%, but agencies cannot claim Input Tax Credit (ITC) on these.
- Services like airline ticket commission and hotel bookings are taxed at 18% GST, and ITC can be claimed.
- Rent-a-cab services have a GST rate of either 5% or 18%, depending on specific conditions.
- Only agencies that charge 18% GST can claim ITC on business expenses like marketing and office costs.
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.
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 |
Service Provided by Travel Agency
New GST Rate
ITC Allowed?
SAC Code
Service Provided by Travel Agency
New GST Rate
ITC Allowed?
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ITC Allowed?
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ITC Allowed?
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ITC Allowed?
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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 |
Service Provided by Travel Agency
GST Rate
ITC Allowed?
SAC Code
Service Provided by Travel Agency
GST Rate
ITC Allowed?
SAC Code
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ITC Allowed?
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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) |
Scenario
ITC Eligibility
Scenario
ITC Eligibility
Scenario
ITC Eligibility
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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