The GST on Tours and Travels involves different rates based on input tax credits (ITC). Without ITC, a 5% GST is applicable, while an 18% GST is applied with ITC, affecting both travelers and tour operators.

For insights on the HSN code and GST for travel agents, read further.

Scope of GST for Tours and Travels

Under GST regulations, tour operators have three options concerning operations and ITC claims. ITC allows businesses to deduct tax paid on purchases from their tax liability on sales.

Detailed Explanation:

1. Tour operators without ITC charge a 5% GST on tour packages.
2. Operators claiming ITC apply an 18% GST; they must consider place of supply rules.
3. As a pure agent, the tour operator charges 18% GST, with actual expenses listed separately as reimbursements.

Value of Supply for GST on Tours and Travels

As a pure agent, the operator can exclude provider expenses, refining tax liability estimation.

Time of Supply for GST

For non-pure agents, GST payment is due upon payment or invoice issuance, whichever comes first. Pure agents charge GST when the final invoice is issued or commission received, earlier outcome prevails.

Place of Supply for GST

For hotel bookings, the supply place is the hotel’s location, affecting ITC eligibility. For flights, the departure location is the supply place, impacting ITC claims based on GST registration.

GST on Tours and Travels with HSN Code

Under Heading 9985, a 5% GST rate is available if certain conditions are satisfied, such as no ITC on direct services.

ITC Claims for Tours and Travels GST Rate

Charging 18% GST allows tour operators to claim ITC on services like rent and professional fees.

• Air travel agents can claim ITC on GST paid for commissions.
• Inbound tour fees with 18% GST allow ITC claims if outsourced.
• Hotel commissions include 18% GST, eligible for ITC.
• Other renting services have 18% GST, with ITC eligibility.