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

Tour Operator	Travel Agent
A tour operator is an individual or company that organizes and manages vacations and vacation packages.	A travel agent is a professional or agency that sells vacation packages, acting as an intermediary between travelers and service providers.
The tour operator designs and provides the services.	Travel agencies purchase holiday packages from tour operators and sell them to tourists.
·     A tour operator ensures that tourists enjoy the vacation packages they have booked. ·     Tour agents ensure that clients have a good time on their vacation.	A travel agent works with clients to help them decide whether and which vacation to embark on.

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.

Aggregate Turnover	Registration Required
Surpasses Rs.20 lakh	Yes – For states in Normal Category
Surpasses Rs.10 lakh	Yes – For states in Special Category

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:

Particulars	GST Rate	Effective GST Rate
Domestic Air Ticket	18% on 5% of the basic fare	0.90%
International Air Ticket	18% on 10% of the basic fare	1.80%

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.

Location of Hotel	Place of Supply
India	location of the Hotel
Outside India	Agent’s location

Example:

Agent Location	Hotel Location	Place of Supply	Tax to be levied
Mumbai	Jaipur	Jaipur	IGST
Delhi	London	Delhi	CGST+SGST

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:

Agent Location	Traveler Registration Status	Traveler Location	Hotel Location	Place of Supply for Agent	Tax to be levied
Delhi	Registered	Indore	Udaipur	Indore	IGST
Delhi	Registered	Mumbai	Dubai	Mumbai	IGST
Delhi	Unregistered	Germany	Pune	Pune	IGST

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

Explanation	SAC Code	GST Rate
Services provided by a tour operator to a foreign tourist in relation to a tour conducted wholly outside India.	9985	NIL
Supply of tour operators services.         Explanation: "tour operator" means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours. Reservation services for accommodation, cruises and package tours	998552	5%
Renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient.	9966	5%
Supporting services in transport.	9967	18%
Other travel arrangement and related services n.e.c	998559	18%

Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website.