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.

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.