Commission recd. by air travel agent from international hotel

[shabnoor kazi]

I have a query regarding gst on commission recd by travel agent from international hotel not because of travel agent book hotel on behalf of customers but because of just hotel ask agent to suggest name of hotel to passenger and if customer book hotel on their own, travel agent receive commission. Here neither travel agent book hotel nor receive payment from customer and also not issue invoice to customer. here hotel received payment from customer and hotel raised invoice directly to the customer. travel agent just invoice for commission to hotel.

QUERY: What would be the implication under GST on receipt of commission.

[DR.MARIAPPAN GOVINDARAJAN]

In my view GST is applicable if the total commission exceeds the threshold limit.

[KASTURI SETHI]

The activity mentioned by the querist conforms to the definition of "Intermediary Services" Section 13 (8)(b) of IGST ACT, 2017 is applicable.

[VAMSI KRISHNA]

Dear Querist,

As per my knowledge,

1) Catagery of Serive provided by Supplier - Intermediary service
2) Location of supplier - Outside india
3) Place of supply - Location of supplier i.e outside india (as per 13(8)(b) of IGST act)
4) is it interstate supply as per section 7 of IGST act ??? No

Hence the service provided by supplier is outside of ambit of GST.

Thanks

Dear experts, kindly let me know if my understanding of law is wrong, if any.

[KASTURI SETHI]

Sh.Vamsi Krishna Ji, I agree with you in toto.

AI Summary

Intermediary services: commission from international hotel treated outside GST when supplier is located abroad. The commission paid by an international hotel to a travel agent for referral services is characterised as intermediary services; where the supplier is located outside India the place of supply is the supplier's location, placing the transaction outside the scope of GST. Separately, GST registration and taxability issues may arise if aggregate commission exceeds the statutory threshold.