GST on Hotel Agent commission portion or whole invoice value

[SUBHASH JHA]

Dear sir,

BTC Ltd (Travel co.) purchase Hotel package service from TBO (Travel boutique online) and TBO provides Hotel booking service and charges commission form BTC Ltd. E.g Hotel rate is Rs 10,000 and commission Rs 1000 (inc GST), Total Invoice Rs 11,000.

Now BTC Ltd offer same service to individual customer and charges Rs 11,000(as above) plus 4000(Commission), total 15,000 plus GST (15000*18%) i.e 17,700.

Although owner of Hotel would have charged gst on hotel bill and TBO is also not charging GST on total value (Rs 11,000) BUT BTC Ltd is charging GST on Total value (Rs 15,000) although BTC should charge gst on commission part only being an intermediary. BTC gives justification that since he issue invoice to customer on his own name, he will charges gst on Gross value.

Now question is whether BTC Ltd should charge GST only on commission portion (Rs 4000) or total value Rs. (15,000). Please clarify. Thanks a lot.

[KALLESHAMURTHY MURTHY K.N.]

Sir,

GST on the value of Ts. 11000-000 has been suffered to tax. It would be double taxation if BTC Ltd. charged GST on the same along with its commission. He has to collect tax on his commission only.

Regards,

This is my personal opinion. 

[Shilpi Jain]

Agreement terms between hotel and BTC required to determine the tax liabilities.

[SUBHASH JHA]

there is no agreement between BTC and various hotels at all.

[Tarun Agarwalla]

dear sir

the terms of contract is very important here. the primary question is the Hotel while charging 10,000, to whom it is raising invoice? if the GST on the hotel accommodation is over and above 10,000 then who is bearing its cost? appearing Rs 10,000 is inclusive of the cost of GST, and where the invoice is raised on TBO or BTC, anybody could be eligible to avail ITC. if that being the case to the extent of the GST amount TBO/ BTC would be enriched.

where it is so defined that the hotel would raise the tax invoice directly to the customer say 10000plus GST, then if customer is paying GST amount directly to hotel then BTC may raise the GST on value 5000, after taking credit of GST paid on Rs 1000 to TBO.

if the arrangement is that the hotel would charge 10,000 plus Gst to BTC. and as TBO is charging 1000 plus Gst to BTC. BTC would finally raise invoice to customer 15000 plus GST and would take credit of all the GST. 

please support with fact to the above situations

[KALLESHAMURTHY MURTHY K.N.]

Sri Tarun Agarwalla Ji,

Sir, 

There are two parts of transactions.

One is the payment for the food supply from the Hotel, which is supposed to be paid by the Agent collecting from the customers in advance. 

 The second part is the Commission of the Agent for the supply of services to the Customers on which he is required to discharge taxes. It is pertinent to note here that the Agent cannot avail of input tax on the food supply from the Hotel whether it is within the state or other states.  

 In any agreement designed in any manner, the agent cannot take any advantage other than the agreed commission.

 With regards.

This is my personal opinion on the issue 

AI Summary

Debate on whether BTC Ltd should charge GST on full invoice value or just on commission for hotel packages. A discussion on a forum revolves around whether BTC Ltd, a travel company, should charge GST on the entire invoice value of Rs 15,000 or only on the commission portion of Rs 4,000 when reselling hotel packages. BTC Ltd charges GST on the total value, justifying it by issuing invoices in its name. Respondents argue that charging GST on the full amount could lead to double taxation, suggesting GST should only apply to the commission. The necessity of understanding contractual terms and invoices between BTC, TBO, and hotels is emphasized to determine the correct GST application.