One of my clients are actually the travel booking agents, they are not direct agents for booking the hotel & vehicle booking, they are just the mediators between the Travellers & Travel agents.
They raise an Invoice to the Travellers based on the expenses incurred to them on travel agents.
They say their applicable Service Tax rate is as follows:
1.For booking for Hotels only –1.03%. 2.For booking of both Hotel & Vehicles - 2.58%. 3.For booking of Vehicles only – 4.12%.
Can anyone pls tell me are they correct that their service is taxable on above percent only or at normal service tax rate of 10.3% itself.
27 August 2009
They can enjoy the abatement of services for hotel & vehicle booking. For other services like pp/visa 10.3% would apply and for dom air tkts 0.618% and for intl 1.236% are applicable
24 July 2025
Great question about the service tax rates and abatement for travel agents and their hotel & vehicle booking services!
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## Service Tax Rate for Hotel & Vehicle Booking by Travel Agents (As of 2009)
### 1. **Normal Service Tax Rate (at that time):**
* The standard service tax rate was **10.3%** (including education cess).
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### 2. **Abatement for Travel Agents (Notification No. 30/2004-ST and related):**
Travel agents were eligible for **abatement** (partial exemption) on the gross amount charged, because they often collect payments on behalf of hotels, airlines, vehicle operators, etc.
Your client's figures for service tax rates (1.03%, 4.12%, and 2.58%) are **correct** as per the abatement rules applicable in 2009.
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If you want, I can help you draft a **compliance note** explaining this to your client or assist with **service tax calculations** for their invoices. Would you like that?