TaxTMI 
TaxTMI 
Our client is a tour operator managing overseas tours like Dubai, USA, etc. For organising tour, they are making payment to overseas suppliers on behalf of their customers. Will Reverse charge applicable on payment made to overseas suppliers for hotel booking, etc?
Reverse Charge on Overseas Hotel Booking
06 May 2019 
5 Replies 
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Reverse charge on imported services may apply to overseas hotel bookings, potentially obliging tour operators to pay GST under RCM.
Whether reverse charge applies depends on place of supply and import status: lodging is supplied at the location of the immovable property, so foreign hotels have place of supply outside India and Indian GST may not apply; conversely, foreign hotel bookings can be treated as imported services, potentially triggering GST liability on the Indian tour operator under the reverse charge mechanism. Related rate notifications and outbound tourism precedents have been relied upon in disputes. (AI Summary)
Whether reverse charge applies depends on place of supply and import status: lodging is supplied at the location of the immovable property, so foreign hotels have place of supply outside India and Indian GST may not apply; conversely, foreign hotel bookings can be treated as imported services, potentially triggering GST liability on the Indian tour operator under the reverse charge mechanism. Related rate notifications and outbound tourism precedents have been relied upon in disputes. (AI Summary)