Tour Operators GST Rate

[JIGAR SHAH]

Our client is into the business of tour operators. His total tour operating income is say ₹ 40 lakhs and total tour cost is say ₹ 35 lakhs. Is he allowed to charge GST @18% on the profit i.e. 18% on 5 lakhs (40-35)?

Another scenario is, is it allowed to charge 18% on total tour operating income i.e. 18% on 40 lakhs, along with Input tax credit (like GST paid on Hotel booking, transportation cost)?

[Rajagopalan Ranganathan]

Sir,

According to Para 2 (zzm) of Notification No.12/2017-Central Tax (Rate) dated 28.6.2017 [with effect from 01.07.2017]) “tour operator” means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours.

According to Sl. No. 23 of Notification No. 11/2017-Central Tax dated 28.6.2017 as amended the rate of tax applicable to tour operator service is 2.5% (CGST) and 2.5% (SGST) provided that credit of input tax charged on goods and services used in supplying the service has not been taken and the bill issued for supply of this service indicates that it is inclusive of charges of accommodation and transportation required for such a tour and the amount charged in the bill is the gross amount charged for such a tour including the charges of accommodation and transportation required for such a tour.

If service provided is only for hotel booking and of hotel charges are recovered separately on actual basis, then GST will be payable @18% treating such service as suppport service of tour operator service.

[Ganeshan Kalyani]

GST@5% on tour operator service is applicable provided that credit of input tax charged on goods and services used in supplying the tour operator service, 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)] has not been taken & the bill issued for supply of this service indicates that it is inclusive of charges of accommodation and transportation required for such a tour and the amount charged in the bill is the gross amount charged for such a tour including the charges of accommodation and transportation required for such a tour.

[JIGAR SHAH]

Dear all,

Thank you for the response towards the query.

[Guest]

Hello Sir,

I am tour operator and I have one query regarding GST filing.

E.g. My Tour Package is of 10,000 INR

Profit = 3000 INR

Paid to Hotel = 3000 INR

Paid to Taxi = 3000 INR

Paid to Flight/Train = 1000 INR

In this case how much GST I have to Pay and what documents need to be attached?

Thanks in advance

Regards,

Patil

AI Summary

Tour operator GST rate: composite inclusive billing applies when input tax credit not claimed; separate hotel bookings attract higher taxation. Where a bill indicates the gross amount charged for a tour inclusive of accommodation and transportation and the supplier has not taken input tax credit on goods and services used to supply the tour, the supply qualifies for concessional composite treatment under the tour operator provisions; if input tax credit is claimed, composite treatment is unavailable. Hotel booking services or separately recovered hotel charges are treated as separate support services and taxed at the general rate rather than under the composite tour concession.