Gst on hotel booking by travel agent

4428 views 9 replies

If a hotel is booked by travel agent then rate of GST if 5% (without ITC)

Suppose a travel agent books a hotel for Rs 10000. After that he adds his margin of Rs 2000. Then on what amount GST should be levied - 12000 or 2000 ? 

Replies (9)
so far as hotel booking is considered the rate is determined by the slabs
provided that upto 1000/= per room per day is exempted in gst
As per section 15 of cgst act Gst should be levied on 12000.
GST is to be Charge on 12000/-

Suppose a travel agent books hotel online for Rs. 2000(including 12% GST) then he adds up his mark-up of rs 200(generally profit margin is very low due to competition) and sell to his client at Rs 2200. He is not eligible to take ITC on input services. So if he charges 5% GST on 2200 then total cost of end consumer will increase drastically and it will not be feasible due to tight competition. 

In air travel booking travel agent charge GST @ 18% on profit margin(processing fee). So I think same will apply to hotel booking also. 

Suppose a travel agent books hotel online for Rs. 2000(including 12% GST) then he adds up his mark-up of rs 200(generally profit margin is very low due to competition) and sell to his client at Rs 2200. He is not eligible to take ITC on input services. So if he charges 5% GST on 2200 then total cost of end consumer will increase drastically and it will not be feasible due to tight competition.  In air travel booking travel agent charge GST @ 18% on profit margin(processing fee). So I think same will apply to hotel booking also.
 


 

Suppose a travel agent books hotel online for Rs. 2000(including 12% GST) then he adds up his mark-up of rs 200(generally profit margin is very low due to competition) and sell to his client at Rs 2200. He is not eligible to take ITC on input services. So if he charges 5% GST on 2200 then total cost of end consumer will increase drastically and it will not be feasible due to tight competition.  In air travel booking travel agent charge GST @ 18% on profit margin(processing fee). So I think same will apply to hotel booking also.

 

Need clarity on the above

Need clarity on the above as the query is a valid one which is faced in practical scenario.will it be possible to pay GST only on the profit amount and if yes then in which section as per GST will it abide.

 

Thanks 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 15 June 2026
Senior Auditor

N. Dhawan & Co

New Delhi

CA Inter

View Details
Company
12 June 2026
Accounts & Taxation Executive

Winshine Financial Services

Mumbai

CA Inter

View Details
Company
10 June 2026
Senior Account Executive

JDS Advisory LLP

Ahmedabad

CA Inter

View Details
Company
25 June 2026
Accounts & Taxation Executive

Dindukurthy & Associates

Hyderabad

MBA

View Details
Company
ARTICLESHIP 18 June 2026
Article Assistance

RB KESHRI & CO.

Mumbai

CA Inter

View Details
Company
ARTICLESHIP 28 June 2026
Article Assistant

Sharma Chetan And Company

Gurgaon

CA Inter

View Details
Company
24 June 2026
Senior Account (VA Client Operations)

Karbon Business

Bengaluru

CA Inter

View Details
Company
ARTICLESHIP 08 June 2026
Internal & Taxation Article

O P Bagla & Co LLP

New Delhi

CA Inter

View Details