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)?
GST Rate for Tour Operators: 5% on Full Package with No Input Credit, 18% on Hotel Booking Only. A discussion on the Goods and Services Tax (GST) rate applicable to tour operators addresses whether GST should be charged on profit or total income. One participant clarifies that according to specific notifications, tour operator services are taxed at 5% provided no input tax credit is claimed, and the bill includes accommodation and transportation charges. Another response indicates that if the service is solely for hotel booking, a GST rate of 18% applies. A tour operator seeks guidance on GST filing, asking about the applicable GST on a tour package and required documentation. (AI Summary)