Service tax/gst for travel agency

1755 views 3 replies

Renjith Sreekumar

29 Points Joined January 2016

Dear Sir,

I run a small trave agency. We have service tax registeration also. In my small town i did consult to service tax office and CA. but most of them are unclear about the current service tax or gst for travel agency and tour operators. We are confused as the same is not even communicated by department via email.

We have the following concerns.

1. What is the current rate slab for travel agency.

2. Airtickets, Domestic Packages, Visa, Taxi, Hotel booking, International packages all used to have different rates. Now people say its is flat 9% on all services. We book all this via a suppliers in delhi. Our suppliers charges a tax of 9% on packages. Do we need to again charge a 9% from customer for the total bill amount or just 9% on the commission we add to the bill.

3. How is this process of taxing on services work for travel agency.

4. Travel industry says the new GST will kill of all small scale travel agencies.

Please guide us.

Replies (3)

Madhukar N Hiregange

Chartered Accountant

39039 Points Joined September 2008

Please wait for 2 weeks for the rates and rules ot be prescribed. As on now not clear.

Ayaz A Akhunji

2 Points Joined June 2017

Dear Mr. Renjith,

Please let me know if you got the answers to your questions regarding GST for travel agents. I have the same business as yours and have the same questions.

Regards,

Ayaz

Gajanan Kerkar

2 Points Joined July 2017

Hello All...

I run a business in Goa, a Travel Company which provides hotel bookings / goa packages, car rentals, event / conference management and air tickets too.. we are a little confused about GST as we have multiple variants. Can someone help me?

1. We come under the "Service Providers" category - kindly correct if I am wrong.

2. We are supposed to be charging 5% GST.. confused about how to charge and on what?

Eg. I have a client Mr X, who wants to stay in a Hotel ABC Goa for 1 night. The hotels actual printed Price is Rs.1000, which is inclusive of all taxes. The Hotel ABC offers me a Net Rate of Rs. 900 which is inclusive of all taxes.

I want to sell to Mr X the same room for Rs. 950. In the above case, 5% GST should be charged on what value.. Rs. 950 or only on the Rs. 50 markup.

How do I offer an invoice to the client Mr X, should I mention Rs. 50 as my service charges?
How will Mr X get the input credit from my invoice? If the client wants invoice, the hotel will not give the invoice of Rs. 950, but of Rs. 900. How do I work this out?

KINDLY Help.. as this looks a little bit of a concern. The CA's I have consulted here have no clue about the right way to do this.

Thanks in Advance.

Gajanan