GST on tour packages service
This query is : Resolved
07 January 2025
Our client started new business of Tour operating service. He only provides dubai tour packages service. clients are in india & he provides service of dubai package. he takes total amount including flight tickets & hotel booking from clients. So how will he charges GST to client? At what amount?
12 August 2025
1. Nature of Service:
Tour Operator Service = Composite supply of travel-related services (flights, hotel, local sightseeing, etc.).
2. Place of Supply:
For international tour packages, the place of supply is outside India.
3. GST Applicability:
If the tour package is entirely outside India (like Dubai tour):
This is considered an export of service because the supply is to a recipient in India, but the place of supply is outside India.
Export of Service Conditions:
Supplier must be in India
Recipient is outside India (or in India for international tour package)
Place of supply is outside India
Payment received in convertible foreign exchange or rupees wherever permitted by RBI.
In your case, clients are in India but the place of supply is Dubai (outside India), so this counts as export of service.
4. GST Rate and Invoicing:
GST Rate: NIL (0%) GST on export of services.
You must issue a tax invoice showing the value of the tour package but charge 0% GST.
Maintain export documents and proof of receipt of payment in foreign exchange or rupees.
5. Breakup of Value for GST Purpose:
The entire package value (including flights, hotels, sightseeing) is the taxable value, but zero-rated GST applies.
Summary:
Particulars GST Treatment
Dubai Tour Package sold to Indian customer Export of service (Place of supply outside India)
GST Rate 0% (Zero-rated)
Invoice Tax invoice with GST @ 0%
Input Tax Credit (ITC) Allowed to claim on inputs/expenses used to provide the service
If your client receives payment in Indian Rupees but as per RBI norms, it’s allowed, export of service rules still apply.
Additional tips:
Your client should register for GST if turnover exceeds threshold.
Maintain proper documentation of services, proof of payment, contracts, and place of supply.
Tour Operator Service = Composite supply of travel-related services (flights, hotel, local sightseeing, etc.).
2. Place of Supply:
For international tour packages, the place of supply is outside India.
3. GST Applicability:
If the tour package is entirely outside India (like Dubai tour):
This is considered an export of service because the supply is to a recipient in India, but the place of supply is outside India.
Export of Service Conditions:
Supplier must be in India
Recipient is outside India (or in India for international tour package)
Place of supply is outside India
Payment received in convertible foreign exchange or rupees wherever permitted by RBI.
In your case, clients are in India but the place of supply is Dubai (outside India), so this counts as export of service.
4. GST Rate and Invoicing:
GST Rate: NIL (0%) GST on export of services.
You must issue a tax invoice showing the value of the tour package but charge 0% GST.
Maintain export documents and proof of receipt of payment in foreign exchange or rupees.
5. Breakup of Value for GST Purpose:
The entire package value (including flights, hotels, sightseeing) is the taxable value, but zero-rated GST applies.
Summary:
Particulars GST Treatment
Dubai Tour Package sold to Indian customer Export of service (Place of supply outside India)
GST Rate 0% (Zero-rated)
Invoice Tax invoice with GST @ 0%
Input Tax Credit (ITC) Allowed to claim on inputs/expenses used to provide the service
If your client receives payment in Indian Rupees but as per RBI norms, it’s allowed, export of service rules still apply.
Additional tips:
Your client should register for GST if turnover exceeds threshold.
Maintain proper documentation of services, proof of payment, contracts, and place of supply.
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