GST on Tours and Travels: Rates, Rules & Billing Guide

GST return filing online means sending details of your sales, purchases, tax paid, and tax collected to the government using the internet. It helps the government track your business taxes and see if you followed GST rules properly.

Let’s meet Rahul Mehra, a 29-year-old marketing executive from Pune. He planned a trip to Manali with his friends and chose a package worth ₹50,000. His travel agent, Sunshine Tours, charged 5% GST on the total cost. That’s ₹2,500 extra, making the bill ₹52,500. 

Rahul also compared a similar package from Elite Holidays, which charged 18% GST but offered ITC to businesses. If Rahul had chosen them, he would’ve paid ₹59,000. “Itna sannata kyu hai bhai?”, he exclaimed when he saw the price difference. This clearly shows how GST on Tours and Travels affects both prices and customer choices.

A Brief Introduction: GST on Tours And Travels 

GST on Tours And Travels has been applied differently based on whether the Input Tax Credit (ITC) is availed or not. Under the 5% GST slab, no ITC is allowed, whereas under the 18% GST, full ITC can be claimed. This has made tax planning important for both tour operators and customers. Services like hotel bookings, ticketing, visa processing, and tour arrangements are all under GST purview. 

According to the Economic Times, June 2025, India's GST collections for May 2025 hit ₹1.85 lakh crore, indicating strong compliance. This includes significant growth in tourism-related services post-pandemic, suggesting that GST on Tours And Travels is stabilising and contributing more to the national revenue.

GST on Tours And Travels – Categories With Price and Applicable GST Rate

Here’s a helpful table to understand how various travel services are taxed.
 

Example: Pooja Sharma, a business consultant from Delhi, used a travel agency to plan a corporate trip. Her company opted for a package with ITC, so although she paid more upfront, she could claim ₹5,400 as ITC. "Mogambo khush hua," said her manager after checking the tax return.

GST on Tours And Travels – Types & Their HSN Codes

Here’s a table showing HSN/SAC codes used by travel agents:
 

Example: Ramesh Yadav runs a small tour company in Varanasi. His monthly turnover is ₹3,50,000, and he issues GST invoices to clients. He uses correct HSN codes like 9985 for travel arrangement services.

Using the right HSN codes helps him file accurate GST returns and avoid penalties. With a smile, he often says, “Picture abhi baaki hai mere dost,” as he stays prepared for audits and savings.

Types of Tours and Their GST Applicability
 

Example: Neha and Arjun, a newlywed couple from Jaipur, booked a customised honeymoon package worth ₹1,00,000. They were charged 5% GST, adding ₹5,000 to their bill.

When they asked about claiming a refund, their travel agent replied with a grin, “Tumse na ho payega ITC ka jugaad”, explaining that Input Tax Credit (ITC) is not available on personal travel expenses.

Impact of GST on Tours And Travels

The GST has had a mixed impact:

• Higher costs for customers when ITC is not availed: A family booking a ₹50,000 tour pays ₹2,500 extra as GST with no refund option.
   
• More compliance for agents, especially regarding invoicing and place of supply: A travel agent in Delhi booking a Kerala package for a Mumbai client must show correct state-wise GST on the invoice.
   
• Increased transparency, as invoices must show the GST breakup: Customers now receive bills showing exact GST components, CGST, SGST, or IGST, clearly listed.

Example: Siddharth, an entrepreneur from Bangalore, spent ₹2,00,000 on a business conference in Goa. With 18% GST (₹36,000), he claimed full ITC. But if it were personal travel, ITC wouldn’t apply.

Impact Table:
 

Input Tax Credit (ITC) on Tours and Travels

ITC can be claimed only when GST 18% is paid and services are used for business. ITC is not allowed if:

• GST is paid under 5% category
   
• Travel is for personal use
   

Example: Anand, who works at an MNC, booked a hotel room for a seminar. GST paid = ₹4,500. Since it was for business, his firm claimed ITC. “All is well,” said his boss.

Place, Time, and Value of Supply – Simplified
 

• Place of Supply: Depends on hotel/flights location. No ITC if business isn’t registered in that state.
   
• Time of Supply: Earlier of invoice or payment (if not a pure agent).
   
• Value of Supply: Pure agents can deduct actual expense from tax value.

Example: Zoya, a travel agent in Hyderabad, booked a Mumbai hotel for her client. As her firm wasn't GST-registered in Maharashtra, she couldn’t claim ITC. “Zindagi mein teen cheezein kabhi underestimate nahi karni: GST, paperwork, aur Mumbai traffic,” she quipped.

Conclusion of GST on Tours And Travels

It can be clearly seen that GST on Tours And Travels has created two roads: one with higher upfront cost but benefit of ITC, and another with low tax but no credits. For businesses, claiming ITC through proper billing and GST codes is vital. For regular travellers, understanding these taxes can help avoid unnecessary costs. To quote from 3 Idiots, “Success ke peeche mat bhago, GST samjho, success jhak maar ke peeche aayegi.”

FAQs Related to GST on Tours And Travels

Q1. Is ITC available on personal travel?
No, ITC is not available for personal tours.

Q2. Can tour operators charge 5% GST and claim ITC?
No. If 5% GST is charged, ITC cannot be claimed.

Q3. What is the HSN code for booking flight tickets?
The SAC code is 998551, with 18% GST applicable.

Q4. Can ITC be claimed on international tour packages?
No. International tours conducted entirely outside India are taxed at 0%.

Q5. Are services like passport and visa taxable?
Yes. Visa/passport services attract 18% GST under SAC 998555.

Q6. Is GST charged on hotel bookings done through agents?
Yes. Agents charge 2%-18% GST, depending on ITC eligibility.

Q7. Can Uber or Ola drivers claim ITC?
No. As per GST law, platforms like Ola or Uber pay GST under section 9(5).

Q8. Is GST applicable to travel agencies?
Yes. GST applies to all registered tour and travel operators.

Q9. How is GST paid if travel covers multiple states?
Place of supply rules must be followed. Registration in multiple states may be needed.

Q10. Can commission earned on train ticket bookings be taxed?
Yes. It is taxed at 18% under code 9967.
 

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