GST Rates and SAC Codes for Services by Travel Agents

Introduction to Travel Agents

A travel agent serves as a mediator between travelers and service providers such as hotels, airlines, car rental companies and tour operators services include accommodation booking, rail and air ticket booking, sightseeing tours, cab pickup and drop and more. These services are commission-based and the commissions they earn are taxable and fall under the GST regime.
Their primary responsibility is to streamline the travel planning process for their clients by offering expert consultancy services and creating comprehensive travel packages.

Comparison between Tour Operators and Travel Agents

GST registration threshold limit for Travel Agents:

Every tour operator with a turnover exceeding Rs.20 lakhs in the previous financial year must have GST registration. For specific categories states, the maximum turnover threshold is Rs.10 lakhs.

Chargeable Services of Travel Agents

The chargeable services provided by Travel Agents are as follows:

1. Air Ticket Booking
2. Hotel Booking
3. Services like Visa, Passport
4. Rail Ticket Booking

1. Air Travel Booking:

An 18% GST will apply to the commission received by an agent from the airline, as well as to the service charges collected from the customer.

As per rule 32(3) of CGST Act 2017, the GST rate on commission received from airlines is as follows:

2. Hotel Booking:

GST will apply to bookings made through agents or intermediaries. Again, GST will be charged in two ways. Let's understand in detail to determine which type of GST will be applicable, i.e., IGST or CGST + SGST.

When the Agent receives a commission from the Hotel:
• If the Hotel is located in India (domestic), then the place of supply will be the hotel’s location.
• If the Hotel is located outside of India, the place of supply will be the Agent’s location.

Example:

When the Agent receives a commission from Traveler:
• If a traveler is registered, then the place of supply will be the traveler’s location i.e. location of the service receiver.
• If the traveler has not registered, the location of the supply will be the Hotel.

Example:

3. Services like Visa/Passport:

Visa and Passport services can be offered in two ways:

• Visa Statutory Authorities:
Charges levied by the Statutory Authorities for visas are exempted from GST when a customer approaches them directly.

• Visa Facilitation Centers:
Visas or passports obtained through facilitation centers or travel agents are taxable. When an air travel agent provides these services by adding their commission, they are taxable at 18% GST. The agent can claim an Input Tax Credit (ITC) on the GST paid to Visa Facilitation Centers.

4. Rail Ticket Booking:

A traveller has two options for booking a train ticket: through a rail travel agent or directly through the railways. If he books a ticket through a rail travel agent, GST at 18% will be applicable on the commission charged by the agent to the traveller. At the same time, railways do not pay any commission to the agent for the booking.

GST Rate and SAC Code on Travel Agents Services

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