GST On Hotel Booking for Travel Agents! Please Help Please!

Dear All

Very Good Evening. We run a small travel agency, I wanted to ask if we charge 5% GST on tour package services, and then we book a hotel which charges 18% GST, so can we claim back some of the GST?

For example, we sold a package at INR 105000 (Including INR 5000, 5%), it included Accommodation and Car Hire. If we booked accommodation worth INR 80000 and paid about INR 15000 GST (18%) on that, can we claim back that GST as we are already paying 5% GST?

We would really be very thankful for any help on clarification on the above.

Kind Regards,

Harish Kumar

Replies (4)
Quick Summary
A tour operator charging 5% GST under a composite scheme cannot claim Input Tax Credit (ITC) on hotel bookings taxed at 18%. Under GST rules, ITC is blocked for such services, even if input GST is higher. The 5% scheme applies on gross package value with no ITC benefit.

In hotel can't charge IGST. thy only charge cgst and sgst. if you have no office in outside state then you can not get ITC

Thank you for the input sir, so we are actually paying about INR 5000 in GST Taxes, Plus INR 15000 in CGST and SGST, plus INR 1000 5% GST for transport (considering the total value for transport is about INR 20000, and Hotels INR 80000) plus TDS plus income tax?

And if we are incorporated in Rajasthan and we book a Hotel in Rajasthan which charges 18% tax, can we get all of the 18% tax back?

Once again thank you for the reply sir!

Yes u get it

 Tour Operator service provider:
How does he differs from a Pure Agent?
A pure agent only facilitates the transaction and helps the travellers to identify various supplier as per their requirements. Whereas, the tour operator does the entire booking of tours and the total fees charged shall include his margin. Hence he becomes a tour operator service provider and the entire service value is leviable under GST.
What rate is applicable for Tour Operator?
GST Rate is 5% with a restriction on availing of Input services (CGST @ 2.5% and SGST @ 2.5% or IGST @ 5%].
Is there any condition to be fulfilled by the Tour operator?
Yes. The tour operator has to fulfill all the following condition to avail composite GST Rate @ 5%.
 The bill issued for the supply of this service indicates that it is inclusive of charges of accommodation and transportation required for such tour and
 the amount charged in the bill is the gross amount charged for such a tour. Is there any restriction in availing Input Tax Credit?
Yes. The input tax credit of both goods and services not available. However, the ITC of input service is available in the same line of business. (Eg: a tour operator service procured from another tour operator service).
Whether the service provider collects CGST & SGST or IGST?
Yes. It may vary depending on the place of supply.

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