GST on Tour and Travels


GST is a destination-based tax on consumption of goods and services. This tax is levied at all stages right from the manufacture /production up to its final consumption with credit of taxes paid at previous stages available as set off. In other words, the value addition will be taxed. The taxpayer of goods and services will pay differential tax equal to output tax minus input tax.

As per the  Indian Association of Tour Operators (IATO) which  is the National apex body of the tourism industry,the GST levied on the tourism sector has been classified :


GST on Tour Operators and Air Travel Agents

  • GST @ 5% has been applied on services of tour operator without benefit of Input Tax Credit (ITC) on goods and services. 5% GST will be payable on the gross amount charged by the tour operator from the customer. This GST is uniform for all services – package tours, hotel accommodation only etc.
  •  In the case of Intra-State supply of tour operator’s services, [email protected]% and SGST @ 2.5% will be levied making the total tax as 5%. On the contrary, in the case of Inter-State supply of services, 5% IGST will apply on services of tour operators, without ITC benefit.
  • The concessional GST rate of 5% is subject to meeting the following conditions:-
    (i) Input Tax Credit on goods and services used in supplying output services of tour operator has not been taken.
    (ii) The invoice / bill issued for supply of output service indicates that it is inclusive of charges of accommodation and transportation required for such a tour. This narration can be given by way of footnote in the invoice.
    In case any of the above conditions are not met, the benefit of concessional rate of 5% would not apply and in that event the Department may demand full 18% GST from the tour operator.
  • While paying 5% GST, tour operators will not claim CGST, SGST and IGST charged by hotels, transporters, airlines, restaurants, travel agents, guide, house boats, cruise ships, luxury trains,monument entry fees, joy rides etc. as input tax credit. Secondly, GST charged by counterpart tour operator will also not be available
    as input tax credit to the tour operator.
  • Services provided by house boats (moving) in Kerala and cruise ships, in the opinion of our Association, are also covered as Tour Operators Services. In both these cases, accommodation, food,transportation, sightseeing and other value added services are provided as combo package.
  • The services provided by static house boats (in Kashmir) by way of providing accommodation and food to the tourists are not covered within the ambit of tour operators as such. These services are akin to services of hotels, inns, guest houses, campsites and other commercial places for residential or lodging purposes. The rate of GST in these cases will be linked with the declared tariff per day.
  • In the case of camping, the service providers providing services such as tent, shamiana, catering etc. will get classified under the respective heads and not as tour operators. In case a tour operator purchases goods and services from unregistered vendors, GST needs to be paid by the tour operator on reverse charge principle.
  • Tours conducted through luxury trains like Maharaja Express,Deccan Odyssey, Heritage of India etc. are also covered as Tour Operators Services. Services such as accommodation, attached bathroom, meals, dining cars, bar, lounge, live TV, Wi-Fi, saloon facility, guide, local sightseeing at specified stoppage points etc. are available in these luxury trains.


  • As a general rule, air travel agents are required to pay 18% GST on commission earned from airlines and also service charges, handling charges etc. (by whatever name called) collected from the customers / passengers. There is no bar on air travel agents in availing ITC on input services to support the output services of travel agents.
  • As an alternate to GST payment in the above manner, of CGST rules, 2017 permits an air travel agent to discharge GST at fixed percentage of basic fare on which commission is normally paid by the airlines to the agent. In such a case, the effective value and the effective rate of GST is tabulated below:-
Type of
Basic fare
rate of
(% of 2)
Domestic ticket 1,00,000/- 5,000/- (5%
of basic fare)
900/- 0.9%
1,00,000/- 10,000/-
(10% of basic
1800/- 1.8%
  •  In case an air travel agent opts to pay GST on basic fare module,he is not required to pay GST separately on commission, if any,received from the airlines as well as service charges / booking charges / management charges from the customer / passenger.
  • The above rates of GST are applicable to IATA agent having inventory to issue air tickets on behalf of the airline. In case an air travel agent buys ticket from IATA agent and charge service charges only from the customer / passenger as his mark-up, such agent is not authorized to work on basic fare module. He will pay 18% GST on his service charges disclosed separately in the invoice issued by him to the customer.


Rail Travel Agents are required to pay 18% GST on service charges collected from the customers / passengers. No other optional rate is applicable in their case.


  • A cab operator is required to pay 5% GST on renting of motorcab where the cost of fuel is included in the consideration charged by him from the service recipient. Secondly, the cab operator is debarred from availing ITC facility.
  •  In other cases, not covered by para 6.1, [email protected] 18% is applicable with ITC facility.
  • GST is payable by the cab operator on his own. There is no reverse charge tax liability of tour operator obtaining transportation services from cab operator even if the cab operator is an individual / nonbody corporate. The members may recall that under Service Tax regime (up to 30.06.2017), a tour operator (body corporate)obtaining transport services from cab operator (non-body corporate) was required to pay service tax as his RCM tax liability.This has been stopped from 01.07.2017 under GST regime.


  • Services by way of entrance to museum, national park, wildlife sanctuary, tiger reserve or zoo are fully exempted from GST.
  •  Entrance fees for entry into Govt. monuments are not specifically exempted. However, services provided by Central Govt., State Govt., Union Territory or local authority are exempted if the consideration for such services does not cross Rs. 5,000/- (rupees five thousand).
  • Services by way of amusement facilities / joy rides like camel ride,elephant ride, horse ride, boat ride, jeep safari etc. attract 28% GST with SAC code as 9996. The benefit of ITC will not be available to tour operator paying 5% GST.
  •  Other services such as porter services, guide services etc. attract 18% GST with SAC code as 9985. The benefit of ITC will not be available to tour operator paying 5% GST.


Click to access GST_Circular_from_IATO.pdf

GST on Tour Operators and Air Travel Agents

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