If Tour operator avail any services from another Tour Operator - GST method to follow

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Tour Packages

0 Points Posted on 23 May 2023

Principal basis: If the Tour operator avails any services from another Tour Operator without ITC, Do we charge GST on the Markup Value of 5 % or Total Tour Packages cost or 18 % or 5 % only on Markup?

Example :

We purchase a complete Tour Package from a B2B tour operator for Rs.50,000 ( includes, flight, visa, hotel, transfer, and sightseeing) and facilitate the service to our B2C client with a markup of Rs 1000.
Which option is correct

50,000 * 5% = 2,500, In this format the client gets charged 5 % GST twice.

1000 * 18% = 180

Your valuable assistance is highly appreciated.

Thanks!

CPH

Replies (2)

Pankaj Rawat

GST Practitioner

55067 Points Posted on 24 May 2023

ITC is available when one tour operator bill to another tour operator (same line of Business)

So you claim ITC on tax rate 5% inward supply from tour operator & can charge & collect 5% on your outward supply.

Thus go for 1st option customer is required to pay tax only on value addition.

Reference : notification 1/2018 inserted the following to in notification 11/2017
in serial number 23, against item (i) in column (3), in condition 1 in column (5), after the words “supplying the service”, the words and brackets “, other than the input tax credit of input service in the same line of business (i.e. tour operator service procured from another tour operator)” shall be inserted