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)?

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.