Gst on hotel booking by travel agent

Umer Dar (6 Points)
Replied 24 July 2018

so far as hotel booking is considered the rate is determined by the slabs
provided that upto 1000/= per room per day is exempted in gst

jaskamal singh (Job) (741 Points)
Replied 24 July 2018

As per section 15 of cgst act Gst should be levied on 12000.

Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 24 July 2018

GST is to be Charge on 12000/-

Piyush Moriani (48 Points)
Replied 25 July 2018

Suppose a travel agent books hotel online for Rs. 2000(including 12% GST) then he adds up his mark-up of rs 200(generally profit margin is very low due to competition) and sell to his client at Rs 2200. He is not eligible to take ITC on input services. So if he charges 5% GST on 2200 then total cost of end consumer will increase drastically and it will not be feasible due to tight competition.

In air travel booking travel agent charge GST @ 18% on profit margin(processing fee). So I think same will apply to hotel booking also.

Piyush Moriani (48 Points)
Replied 25 July 2018

Suppose a travel agent books hotel online for Rs. 2000(including 12% GST) then he adds up his mark-up of rs 200(generally profit margin is very low due to competition) and sell to his client at Rs 2200. He is not eligible to take ITC on input services. So if he charges 5% GST on 2200 then total cost of end consumer will increase drastically and it will not be feasible due to tight competition. In air travel booking travel agent charge GST @ 18% on profit margin(processing fee). So I think same will apply to hotel booking also.

1 Like

Piyush Moriani (48 Points)
Replied 25 July 2018

Suppose a travel agent books hotel online for Rs. 2000(including 12% GST) then he adds up his mark-up of rs 200(generally profit margin is very low due to competition) and sell to his client at Rs 2200. He is not eligible to take ITC on input services. So if he charges 5% GST on 2200 then total cost of end consumer will increase drastically and it will not be feasible due to tight competition. In air travel booking travel agent charge GST @ 18% on profit margin(processing fee). So I think same will apply to hotel booking also.

1 Like

marshal (auditor) (59 Points)
Replied 28 January 2019

Need clarity on the above

marshal (auditor) (59 Points)
Replied 28 January 2019

Need clarity on the above as the query is a valid one which is faced in practical scenario.will it be possible to pay GST only on the profit amount and if yes then in which section as per GST will it abide.

Thanks