Small notes to tour operators
Tour Operators consists of customized tours, including travel, accommodation and sightseeing. Only outbound tour sold to a foreigner for visiting another foreign country and the payment is received by convertible foreign exchange is exempt from GST. All other tours (including inbound tours for foreigners) are taxable. GST paid on the purchase of tour packages from another tour operator can be claimed as ITC and only the difference of tax can be paid to the Government. A tour operator must keep accurate records to establish which part of the package relates to exempt supplies, zero rated supplies (travel to a place outside India sold to foreign citizen) and taxable supplies
GST on Hotels and lodges
|Room tariff less than Rs 1000||NIL (Exception)||Not applicable|
|Rs1000 to Rs2,499||12%||Applicable|
|Rs2500 to Rs4999||18%||Applicable|
|Rs5000 or more||28%||Applicable|
The taxable supplies for the travel industry are as follows:
- Inbound tour packages (domestic tour), whether sold to Indian resident or Foreign resident.
- Outbound tour packages (international tour) sold to Indian resident.
- Agency services.
- Passenger Transportation services (Sea, Land and Air Transport).
Some of the related taxable purchases in the Travel Industry which are subject to GST are as follows:-
- Hotel Accommodation;
- Transportation/ hire of vehicles /car hire;
- Tour package;
- Restaurant meals and dining places;
- Tickets for entry to exhibitions, entertainment venues;
- Hospitality (spas and resort);
- Agency commission;
- Booking Fees;
- Tourist Guide;
- Tour Deposit;
- Amendment Charges for Inbound/Outbound Tour Package and Domestic Air Ticket;
- Travel Insurance;
- Visa Service Fees; and
- Other related tourism services.
Supply of travel insurance services for an inbound/outbound tour is taxed at applicable rates and the premium charged is subject to GST at 18%. The arranging of travel insurance for inbound or outbound tour is taxed at applicable rates and the commission charged for such a supply is subject to GST at 18%.
AIR TICKETING SERVICE FEE
- Profit mark-up/service fee charged for domestic flight is subject to GST at 18%
- Profit mark-up/service fee charged for international flight dis-embarking from India, is subject to GST at 18%
- If any service fee charged separately, then it is subject to GST @ 18%.
- Any commission received from airline is subject to GST @ 18%.
- Supplies of Tour operator’s services are taxable at the rate of 5%. No input tax credit will be allowed when the rate of 5% is charged.
- When supply is made to a registered person, GST of 5% will be charged depending upon the location of recipient of services i.e. Customer. Taxable invoice will be issued at the Customer’s registered address under GST.
- When supply is made to an unregistered person, GST will be charged depending upon the location of Tour Operator. Bill of supply will be issued for the services rendered by Tour Operator.
- The tour operator has to identify the nature of supply i.e. whether the tour package services are intra-state or inter-state, which in turn depends upon whether the recipient of service is registered or un-registered.
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