Gst on hotel accomodation

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marshal (Querist)
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18 September 2018 Need help in understanding GST Procedures for the below case study

A tour operator agent(E.g Riya Travel) only books hotel in Dubai (Taj) for a client in India (Infosys Guest)

Tour operator Pays to the hotel in Dubai USD 100 - Will GST be applicable on making payment to Dubai Hotel as per GST law under RCM and at what rate

Dubai Hotel Pays commission to tour operator @10% - USD 10 - Will GSt need to be paid on this USD 10 if yes then at what rate.

Tour Operator Sells the Hotel with mark up to Infosys @ USD 120- GSt can be charged @ 5% or 18% depending on ITC availament.

And what will be the place of service if tour operator bills to infosys e.g Infosys address or the place of supply of service

Under which SAC code will the above tour operator come into.

As per my above understadning the Tour operator has to make GST payments from all angles.

1(While making payment to Dubai Hotel)
2(While receiving commission from Dubai hotel)- will affect the mark up as overseas supplier will not pay GST
3)While charging client - the normal procedure

Will be highly appreciated if you could clear the above doubts which will help in exam and in real life situations as well

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 September 2018 1 GST not applicable as per place of supply provisions, for immovable property place of supply is location of the property. Service provided outside taxable territory not taxable.
2 GST payable under RCM as it will fall under intermediary service, the place of supply will the place of service provider.
3 5% GST applicable in view of higher rate charged.

marshal

marshal (Querist)
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19 September 2018 thank you so much sir, as i was going through the above sections will it come inder section 13(5) of IGST act as the location of supplier is in India and the location of Recepient also India but only the service is outside India it will come under section 12(3) of IGST Act.The specifi query is when the travel agent receives commission from hotels outisde India will GSt needs to be paid on that amount as well.E.g commission received from hotels for giving them business e.g USD 100 so if GST will be applicable then it would have to be paid from own pocket as foreign hotel wont pay GST.Please advise

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 September 2018 Yes for commission income it will fall under intermediary service for which GST payable under RCM. For intermediary service place of supply will be the place of service provider.

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