GST Requirements for Accommodation and Tour Operators: 18% on Service Fee, 5% for Tour Operator

The applicant is required to pay GST at 18% on the Service Fee/Convenience Fee for 'Accommodation Only' services, not on the total invoice value, provided the conditions of a "Pure Agent" are met. As a tour operator, the applicant must pay GST at 5% (without ITC) as per the specified conditions and does not have the option to charge GST at 18% (with ITC).

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Issues Involved:
1. GST applicability on 'Accommodation Only' services.
2. Option for a 'Tour Operator' to charge GST at different rates.

Detailed Analysis:

Issue 1: GST Applicability on 'Accommodation Only' Services

Facts and Applicant's View:
- The applicant, engaged in outbound tours, provides 'Accommodation Only' services by booking hotel rooms through various hotel aggregators for B2B clients.
- The applicant claims to act as a "Pure Agent," charging GST at 18% only on its Service Fee/Convenience Fee and not on the total invoice value.

Legal Provisions and Analysis:
- Section 2(5) of the CGST Act, 2017 defines an "agent" as someone who supplies or receives goods or services on behalf of another.
- The applicant books hotel accommodations based on the client's requirements, and invoices are issued in the applicant's name, but the cost is passed on to the client without any markup.
- According to Section 2(105) of the CGST Act, a "supplier" includes an agent acting on behalf of another.
- Under Section 9 of the CGST Act, GST is payable by the taxable person on the transaction value of the supply of goods or services.

Conclusion:
- The applicant qualifies as an "agent" and "supplier" under Sections 2(5) and 2(105) of the CGST Act, respectively.
- The applicant is required to be registered under Sections 22 and 24 of the CGST Act.
- The applicant acts as a "Pure Agent" as per Rule 33 of the CGST Rules, 2017, fulfilling conditions such as making payments on behalf of the recipient and not holding any title to the goods or services procured.
- GST is payable at 18% on the Service Fee/Convenience Fee, not on the total invoice value, provided the conditions of a "Pure Agent" are satisfied.

Issue 2: Option for a 'Tour Operator' to Charge GST at Different Rates

Facts and Applicant's View:
- The applicant, acting as a tour operator, contends that they should have the option to charge either GST at 5% (without ITC) or 18% (with full ITC) to pass on the GST input benefit to customers.

Legal Provisions and Analysis:
- Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017, specifies that 'Tour Operators Services' are subject to GST at 5% (with no ITC), provided certain conditions are met.
- These conditions include not taking credit of input tax charged on goods and services used in supplying the service and issuing a bill inclusive of charges for accommodation and transportation.
- The notification was amended on 25.01.2018, but the core conditions for availing the 5% GST rate remain unchanged.

Conclusion:
- The applicant's contention to have an option to charge GST at 18% (with ITC) is not supported by the notification.
- 'Tour Operators Services' are specifically covered under entry (i) of S. No. 23 of Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017, and they are required to pay GST at 5% (without ITC) subject to fulfillment of conditions.
- The option to pay GST at 18% (with ITC) is not available to 'Tour Operators Services' as they are not covered under entry (ii) or (iii) of the said notification.

Ruling:
1. The applicant is liable to pay GST at 18% on the Service Fee/Convenience Fee charged for 'Accommodation Only' services, not on the total invoice value, provided the conditions of a "Pure Agent" are satisfied.
2. The applicant, as a tour operator, must pay GST at 5% (without ITC) as per entry (i) of S. No. 23 of Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017, and does not have the option to pay GST at 18% (with ITC).

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