Need Some Help for Travel Agent

[Mohit B]

I'm an Ahmedabad based travel agent.

My customers want to go to Kerala and for that, I asked for the Kerala package to the local tour operator.

He gave me the invoice with 5% of GST. (Non-commissionable package)

Now I add my margin and need to send the invoice to the customer.

What is the correct step in this scenario?

1) Shall I charge the 5% GST to the customer? (Invoice with GST from Vendor + My Margin + 5% GST)

2) Invoice from Vendor with GST + My Margin + 18% GST of my margin

3) 5% GST with input tax credit(Invoice from Vendor with GST + My Margin)

Or any other option??

[Suresh P]

In case of Hotel Booking or Tour package, in this case Place of Supply is Kerala and tour operator in Kerala can either raise Invoice with 18% GST with ITC OR 5%GST without ITC.In this case actual recepiant of service is the Guests and Kerala Tour Operator has to raise Invoice in the name of Guests.As the place of supply is in Kerala, Guests or you with GSTN outside Kerala in order to claim ITC, they must have a GST Regn in Kerala or a pan India GST.

Better option for you is to make an arrangement with Kerala Tour Operator and charge the Guests together with your margin and You issue a commission invoice in the name of Kerala Tour operator with 18% GST.Kerala Tour Operator can calim this GST paid as ITC.If in case you tell your guests a charge including your commission and the amt transfered to Kerala agent is less than that, you have made a margin bynway of commission and such margin is deemed to be inclusive of GST and to pay GST by working backward.

If Kerala Tour Operator book any Hotels in the name of Guests and if they charge their invoices @5%, No ITC can be availed on whatever count by them.

AI Summary

GST on tour packages: agents should consolidate billing and issue commission invoices so operator can claim input tax credit. GST treatment turns on place of supply being Kerala and the invoicing arrangement: Kerala operator may invoice guests at a lower rate without ITC or at a higher rate with ITC; recipients need Kerala or pan India GST registration to claim ITC. Recommended practice is for the agent to bill guests for the full package, issue a commission invoice to the Kerala operator so that the operator can claim ITC, and, where the agent's margin is retained within an inclusive charge, treat that margin as commission inclusive of GST computed by working backward.