Gst on tour operators



Querist : Anonymous (Querist)
13 March 2018
Hi Experts,

This is related to new notification passed in favour of tour operators mentioning as follows:

To allow ITC of input services in the same line of business at the GST rate of 5% in case of tour operator service

Can anyone provide the proper interpretation for the above ?

Does this mean that a tour operator can charge customer at total invoice + 5% GST and take credit on input service received like hotels / travel etc.


CA R SEETHARAMAN (Expert)


Click to Talk 14 March 2018
In my opinion you can't avail ITC on hotel but ITC can be availed on input service of other tour operators availed by you for which GST is charged at 5%.


Querist : Anonymous (Querist)
14 March 2018
Thank for the input sir.


Querist : Anonymous (Querist)
14 March 2018
So can we say the best way for Tour operators to account for is charging 18% GST on profit / commission instead of 5% of total invoice since in most of the cases procurement is done directly from Hotels / transport companies and hence no credit will be available to them. Understand that for charging 18% Gst is possible only when invoice is received from Vendor in name of customer.


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