Gst on hotel room sale purchase from ota (eg-oyo, yatra etc)

sudip sharma (article) (734 Points)
Replied 21 December 2017

didn't understand your business model. plz explain it easy language then I can comment

manish (properitor) (75 Points)
Replied 03 January 2018

Dear sudip,

I am also trying to understand how I can fit myself to GST.

Let me try to explain the above again:

as a travel agency I have an account with several other big online travel agencies (OTA) like OYO, Make mytrip yatra etc. Now when I purchased a room from them they provide me a commission, this commission is payable only after the check out of client. Now suppose I purchased the room from an OTA for 17000/- in december for the month of January in which he is giving me 1000/- comission. I further added 1000/- in the invoice of client and collected a total of 18000/- from the client. The commission will be given in January after check out of the client. Now I want to know how should I fit all this in GSTR

1- Should I pay 18% tax on my commission and spare the upselling amount (1000/-) for IT records ?

2- or I should pay 5% tax on my total sale amount (i.e. 18000/-) ?

3- Comission will be given in the month of january after the checkout of client. So how to show this sale purchase in GSTR?

Kindly analyse and reply

(Guest)

you did a mistake by doing booking. From now on tell your client to book themselves and you will arrange other other facilities if you deal in them.

You have to pay GST on entire value of Rs. 18000 and not only on commission.

Srishti Agrawal (Practice, Teacher) (172 Points)
Replied 03 January 2018

You need to pay GST only on commission received 1000 in the month of invoice or receipt of payment whichever is early.

manish (properitor) (75 Points)
Replied 04 January 2018

Dear Sachin,

Thanks for your reply, but I am still confused, OYO/makemytrip or any other OTA is also paying taxes on their services. Some of them notifies that the tax invoice will be generated from the hotel & not by the OTA. If I need to pay tax on entire 18000/- as you said than it will become a 3 time tax for the end user. first time by the hotel, 2nd time by the OTA and third time by me.

Can you please discuss this with your friends/collegues and confirm.

manish (properitor) (75 Points)
Replied 04 January 2018

Originally posted by : Srishti Agrawal
	You need to pay GST only on commission received 1000 in the month of invoice or receipt of payment whichever is early.

Thanks for your reply.

Can you please elaborate 'month of invoice'. Invoice means an invoice generated by me for the client or the invoice generated by the OTA/hotel for me?

Srishti Agrawal (Practice, Teacher) (172 Points)
Replied 04 January 2018

Here I mean the invoice issued by supplier, i.e, you. So GST is payable when you issue an invoice for commission or receive payment in form of commission, whichever is earlier. (as per section 31(2) of CGST Act).

The invoice should be issued before or till the date of service being actually provided.

manish (properitor) (75 Points)
Replied 04 January 2018

Originally posted by : Srishti Agrawal

Here I mean the invoice issued by supplier, i.e, you. So GST is payable when you issue an invoice for commission or receive payment in form of commission, whichever is earlier. (as per section 31(2) of CGST Act).

The invoice should be issued before or till the date of service being actually provided.

Thanks for this helpful information.

Now I am left with one more query on my primary question. I will be getting a comission of 1000/- in next month after the service is utilized & I additionally added a markup of 1000/- to my purchase amount which is 17000/- . So I will provide a bill of 18000/- to the client.

Now how should I apply GST on my sale of 18000/- ?

(Guest)

Provisions of the Act:

GST @ 5% has been applied on services of tour operator without benefit of Input Tax Credit (ITC) on goods and services. 5% GST will be payable on the gross amount charged by the tour operator from the customer. This GST is uniform for all services – package tours, hotel accommodation only etc

While paying 5% GST, tour operators will not claim CGST, SGST and IGST charged by hotels, transporters, airlines, restaurants, travel agents, guide, house boats, cruise ships, luxury trains, monument entry fees, joy rides etc. as input tax credit. Secondly, GST charged by counterpart tour operator will also not be available as input tax credit to the tour operator.

@ manish - you have to pay GST on entire sum which you have collected from the customer and not only on commission (it was in earlier system, but now under gst you have to charge GST on entire amount i.e. hotel room charges + your commission + any extra amount you charge from customer)

You can not claim (take input benefit) of any GST paid by hotel. Its your loss. Thats why now hotel booking by agents is not preferred, agents will say to customers to make payment by their own credit card, and agent will just arrange or contact the hotel regarding this and this customer wants to stay in your hotel and now room is booked directly in the customer's name. Earlier what happens, booking agent takes 18000 from customer, pays 17000 to hotel and keep 1000 as commission. But To stop this practice, Booking agent will not come in picture, and now only Customer and hotel will directly transact.

You are correct Manish, Tax is charged two times and you cant claim Input credit. Its your loss. This provision is made to stop B2B practice (You and hotel) and to promote B2C (hotel and customer directly by eliminating agent), otherwise agent has to pay GST without taking any input benefit.

(Guest)

.....

manish (properitor) (75 Points)
Replied 04 January 2018

Originally posted by : Sachin
	Provisions of the Act: GST @ 5% has been applied on services of tour operator without benefit of Input Tax Credit (ITC) on goods and services. 5% GST will be payable on the gross amount charged by the tour operator from the customer. This GST is uniform for all services – package tours, hotel accommodation only etc While paying 5% GST, tour operators will not claim CGST, SGST and IGST charged by hotels, transporters, airlines, restaurants, travel agents, guide, house boats, cruise ships, luxury trains, monument entry fees, joy rides etc. as input tax credit. Secondly, GST charged by counterpart tour operator will also not be available as input tax credit to the tour operator. @ manish - you have to pay GST on entire sum which you have collected from the customer and not only on commission (it was in earlier system, but now under gst you have to charge GST on entire amount i.e. hotel room charges + your commission + any extra amount you charge from customer) You can not claim (take input benefit) of any GST paid by hotel. Its your loss. Thats why now hotel booking by agents is not preferred, agents will say to customers to make payment by their own credit card, and agent will just arrange or contact the hotel regarding this and this customer wants to stay in your hotel and now room is booked directly in the customer's name. Earlier what happens, booking agent takes 18000 from customer, pays 17000 to hotel and keep 1000 as commission. But To stop this practice, Booking agent will not come in picture, and now only Customer and hotel will directly transact. You are correct Manish, Tax is charged two times and you cant claim Input credit. Its your loss. This provision is made to stop B2B practice (You and hotel) and to promote B2C (hotel and customer directly by eliminating agent), otherwise agent has to pay GST without taking any input benefit.

@ sachin - Thanks for your reply and detailed explaination. So now according to your explaination I have to pay tax on my total bill to customer @ 5% (i.e. 5% on entire 18000/- = 900). Additionally I need to pay gst on my commission (i.e. 18% on commission 1000/- = 180). so my total liability in this transaction becomes 900+180 = 1080/-. Am I right?

(Guest)

@ Manish - No, you have liability to pay GST only on gross amount charged to customer i.e. Rs. 18000 * 5% = 900

all inclusive and final. no need to calculate gst separately on Commission.

manish (properitor) (75 Points)
Replied 04 January 2018

Originally posted by : Sachin
	@ Manish - No, you have liability to pay GST only on gross amount charged to customer i.e. Rs. 18000 * 5% = 900 all inclusive and final. no need to calculate gst separately on Commission.

@ sachin: thanks a lot for explaing all this information in detail.

Madhavi Zambre (3 Points)
Replied 29 October 2018

I am Tour Operator . And booking rooms by Make my Trip or Booking.com. They have not offer any commition to me and I am Booking Hotels on their name with out inserting my GSTN,amount paid by me which is given by hime for booking hotel . As no input credit getting to me. Also No commission recived from Hotel. Customer pay me for Planning tours and Hotel booking. Means i am giving only service to Them as a trip adviser and consultant.

Now my question being i am given only service to my cliant for Booking Hotel ,Can I raise tax invoice only for service given for Booking Hotel ie 18 % .

Ex. Hotel Charge is 15000 Rs. I have charged my customer package Rs. 18000

So my Margin is 3000 Rs. Which is recived to me for service providing .

So can i Make Tax Invoice for Rs. 3000+18% GST

And 15000/- Bill i Will Given to My Cliant on which his name is Written.

So GST on Margin 18 % .

Also Guide

How CGST and IGST will charge %

1) Cliant from Maharashtra and Booked tour /Hotel service in Maharastra

2)Cliant from Maharastra and Booked tour /Hotel service out side maharastra.

3)Cliant out of Maharashtra and Booked in Maharashtra

4)Cliant out of Maharashtra and Booked out side Maharashtra

Regards,

Gst on hotel room sale purchase from ota (eg-oyo, yatra etc)

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