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

GST on agent commission: intermediaries should tax their commission only, subject to invoicing and ITC allocation.
Where GST on the hotel supply has already been discharged, the intermediary should charge GST only on its commission to avoid double taxation; contractual terms and the identity of the invoice recipient determine whether the intermediary may instead issue a consolidated invoice and claim input tax credit for the hotel component, but absent such arrangements the intermediary's taxable value is its commission.