Gst on tour arrangements

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This discussion clarifies GST implications for outbound tour arrangements. For tours organised outside India, GST is applicable based on whether the tour operator acts on a principal basis (5% GST with no ITC, or 18% with ITC) or commission basis (18% GST with ITC). The place of supply is generally considered to be in India. If the tour operator only charges a service fee, GST at 18% (with ITC) or 5% (without ITC) applies to the service charge. Notably, outbound tours sold to foreigners for travel outside India, with payment received abroad, are exempt from GST.

Gurvinder Singh

Gurvinder Singh (Querist)
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18 November 2022 Hello Sir,

Please advise, if we need to collect GST on hotel accommodation + transport services provided on tour outside India. If yes, how much percentage and if no, then do we need to pay GST and how much. Pls advise the formula. Thanks.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 November 2022 5% GST applicable on such services.

Gurvinder Singh

Gurvinder Singh (Querist)
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18 November 2022 Thanks for your reply.
On what amount do we charge 5%. Also, is GST applicable on services provided outside India.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 November 2022 Outbound Tour Package:
Tours organized by the Tour Operator, outside India, for the tourist going outside India is known as outbound tour.

Principal basis: If tour is on Principal basis i.e. on its own account has done the various booking and then raises bill on the client, then GST @5% with no ITC (@18% with ITC) & the place of supply shall be location of performance of service i.e. in India
Note: If Tour operator avail any services from another Tour Operator as input service then ITC on such input services which is similar to his output can be taken. (Notification No. 1/2018- Central Tax (Rate), dated 25th January, 2018) (5% on total value not mark-up)

Commission basis: If the tour is on Commission basis then taxable @ 18% with ITC & place of supply shall be location of Service Provider i.e.in India
Service fees on client basis: If hotel/ transporter issues invoice directly in the name of the client and the tour operator issues invoice only for its service fees to the client. The agent will issue an invoice on the client disclosing separately for its service charges and amount charged by the hotel/ transporter for booking. The agent can charge GST @ 18% of service charge only with ITC or GST @5% without ITC

Note: Outbound tour sold to a foreigner for visiting another foreign country & the payment received in foreign country is exempt from GST.

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