Gst on mark or entire value

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marshal (Querist)
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28 January 2019
Suppose a travel agent books hotel online for Rs. 2000(including 12% GST) then he adds up his mark-up of rs 200(generally profit margin is very low due to competition) and sell to his client at Rs 2200. He is not eligible to take ITC on input services. So if he charges 5% GST on 2200 then total cost of end consumer will increase drastically and it will not be feasible due to tight competition. In air travel booking travel agent charge GST @ 18% on profit margin(processing fee). So I think same will apply to hotel booking also.

can GST be charged only on the profit amount and pay to Govt without showing in invoice to the client ,as practically it is not possible to show mark up amount to client.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 January 2019 Yes it's possible to charge 18% GST on profit amount in case of hotels booking.

marshal

marshal (Querist)
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29 January 2019 Dear Sir,It would be great if its supported by proper sections as per GST Act, as per my udnerstanding tour operator or reservation services only for hotel bookings 5% needs to be charged on the entire value including the cost + profit markup.

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