Service tax applicability on travel agent

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 August 2013 I have travel agency business. I have following queries

1)If I do tickets booking for any person and if transfers me in foreign currency but I get amount in INR is this amounts to export of service ? Is there is any benefit for such type of transaction ?
2)what is t/over limit for travel agent if he is buying tickets from agents and selling tickets to customers ?
3)Date of filing Service tax return for quarter ended 31/3/2013 ?
4)what is rate of S.T for international & domestic ticket booking which I should charged and collect from customer . is it on basic price or after charging my margin?
4)What is the S.T applicability on cancellation & rescheduling of Tickets. If i get some money out of this cancellation what is the treatment ?

Please somebody guide

Querist : Anonymous

Querist : Anonymous (Querist)

05 August 2013 No response .... Please need somebody's help

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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24 July 2025 Here’s a clear breakdown of your travel agency service tax queries:

1) Is booking tickets for a foreign client with payment in INR considered export of service?
For service to be treated as export, 3 conditions must be met:

Supplier of service is located in India

Recipient of service is located outside India

Payment for service is received in convertible foreign exchange or in INR wherever permitted by RBI

Since payment is received in INR, but the recipient is outside India, it can still qualify as export if RBI permits INR payment for that transaction.

Export of services is zero-rated under service tax — no service tax payable but you can claim refund of input credit (Cenvat credit).

So if conditions met and RBI permits, you can treat it as export of service with benefits.

2) What is the turnover limit for travel agents for service tax registration?
Service tax is applicable if aggregate turnover exceeds ₹10 lakhs (threshold limit) in a financial year.

Once turnover crosses ₹10 lakh, registration and payment of service tax is mandatory.

3) Due date for filing service tax return for quarter ended 31 March 2013
Due date for filing quarterly service tax return (ST-3) is 25th of the month following the quarter end.

So for quarter ended 31 March 2013, due date was 25 April 2013.

4) Service tax rate on international & domestic ticket booking & basis of calculation
Service tax on travel agent commission/charges is typically around 14% (now GST replaced service tax, but in your context assume service tax).

For International Air Travel, service tax rate used to be 0.5% (on gross amount).

For Domestic Air Travel booking, rate was generally 14% on the commission or service charge collected by agent.

Service tax should be charged on the value of service (i.e., your commission/fee), NOT on the total ticket price.

So if you buy a ticket for ₹10,000 and sell at ₹10,500, service tax applies on ₹500 margin (your commission).

5) Service tax applicability on cancellation & rescheduling charges
If you receive any cancellation fees or rescheduling charges, these are considered part of your service income.

You must charge and pay service tax on such fees as it is a taxable service.

The amount collected from cancellation or rescheduling should be included in your taxable turnover.

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