14 March 2018
What is the rate of gst on travel agent of india who arrange foreign tour to Dubai from red apple ,a Dubai based travel ageny( having invoice value 7500 USD.) and sell the package to Indian customer?what will be gst rate when Indian travel agent issue invoice to Indian customer on his profit margin?
11 July 2024
When an Indian travel agent arranges a foreign tour (e.g., to Dubai) through a Dubai-based travel agency (Red Apple), the GST implications can be understood as follows:
1. **GST on Services by Indian Travel Agent to Customer:** - The Indian travel agent will charge GST on their service fee or profit margin added to the cost of the tour package provided by Red Apple. - The GST rate applicable on services provided by the Indian travel agent to their customer will depend on the nature of services provided and is typically levied at 18% under the GST regime for services like tour operator services unless specifically exempted.
2. **Calculation Example:** - Let's assume the invoice value from Red Apple, the Dubai-based agency, for the tour package to Dubai is 7500 USD. - The Indian travel agent will add their profit margin and other applicable charges. - Suppose the Indian travel agent sells the tour package to the Indian customer for 1,00,000 INR (including their profit margin).
3. **GST Calculation:** - The GST will be levied on the service fee or the profit margin charged by the Indian travel agent. - Assuming the Indian travel agent's profit margin is 25,000 INR, the invoice to the customer will be 1,00,000 INR + GST at 18% on 25,000 INR (i.e., the profit margin).
Total invoice amount to customer: \[ Total = 1,00,000 \text{ INR} + 4,500 \text{ INR} = 1,04,500 \text{ INR} \]
Therefore, the GST rate applicable when the Indian travel agent issues an invoice to the Indian customer will depend on the service fee or profit margin charged by the Indian travel agent. In this case, GST at 18% is applied on the profit margin earned by the Indian travel agent.
It's important for the Indian travel agent to comply with GST regulations, issue proper invoices, and ensure correct GST calculation and payment to the government on their taxable supplies.
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