Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

GST on Tour Operator Options

744 views

Save Share

Join Us Follow Us Add as Source

CA. Bhavik P. Chudasama

Practice

6031 Points Posted on 16 December 2023

Tour Operator have to choose 5% without ITC or 18% with ITC ?? ya every transaction k lie he can choose ?

Replies (2)

Quick Summary

Tour operators in India face a crucial GST decision: opt for a 5% tax rate without claiming Input Tax Credit (ITC), or a 18% rate with full ITC. This choice is binding for the entire financial year and must be declared to GST authorities before filing the first return. The decision impacts how tour operators manage their tax liabilities and overall profitability.

Money Money

433 Points Posted on 16 December 2023

According to the GST law, a tour operator is a person who provides services related to planning, scheduling, organizing, arranging tours, or packages of tours, which may include transportation, accommodation, sightseeing, or other similar services1.

A tour operator can opt for either of the following GST rates for his services2:

5% without input tax credit (ITC) on the value of supply
18% with full ITC on the value of supply
The tour operator has to choose one of these rates for a financial year and cannot change it for every transaction. He has to inform the GST authorities about his choice of rate before the due date of filing the first return for that financial year2.