GST Rate Guide · FY 2025-26

GST on Tour Package in India —
5% or 18%?

The correct GST rate for composite tour packages, tour operator vs travel agent, ITC choices, foreign/international tours, air & hotel components and registration.

Updated for FY 2026-27 GST Expert Reviewed Tour Operator & Travel Agent

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5%Composite package

18%With full ITC

18%Agent commission

₹20LRegistration threshold

Quick Answer

A tour operator selling a composite (all-inclusive) tour package — hotel + transport + meals + sightseeing bundled for one price — charges 5% GST without ITC under SAC 9985/998552. Alternatively, the operator may opt to charge 18% with full ITC, which suits high-cost luxury tours. A travel agent’s commission or service fee is taxed at 18%. Foreign tours sold to an Indian customer are taxable in India.

Composite package 5%

18% (with ITC) route 18%

Agent commission 18%

Alcohol / forex margin Special

At a glance

GST Rate Chart — Tour & Travel Services

Every common tour-and-travel scenario, with the SAC code and whether Input Tax Credit is available. Component rates reflect the GST 2.0 two-slab structure effective 22 September 2025.

Service	GST Rate	SAC	ITC
Composite domestic tour package	5%	9985	No
Composite international tour package	5%	9985	No
Tour operator — optional 18% route	18%	9985	Yes
Travel agent commission / service fee	18%	9985	Yes
Air ticket — economy	5%	9964	Yes
Air ticket — business / premium	18%	9964	Yes
Hotel room ₹1,001–₹7,500/night	5%	9963	No
Hotel room above ₹7,500/night	18%	9963	Yes
Cab / taxi hired for the tour	5%	9964	No
Guide / visa / documentation fee	18%	9985	Yes

Rates reflect GST 2.0 (eff. 22 Sep 2025): hotels up to ₹7,500 moved 12%→5% (no ITC) and business/premium air moved 12%→18%. Confirm on the official GST portal before invoicing.

The core choice

5% Without ITC vs 18% With ITC

For a composite tour package the operator picks one of two routes and applies it consistently. The right choice depends on how much input GST your tour absorbs — mainly on hotels, transport and air.

Composite package — no ITC

Best for budget & mid-range packages
No credit on hotel, transport or guide bills
Keeps the customer price low
Simple, single-rate invoicing
SAC 9985 / 998552

18%

Optional route — full ITC

Best for luxury / high-cost tours
Full credit on inputs (hotels ≥₹7,500, air etc.)
Can be cheaper net-of-credit on premium tours
Must be applied consistently
Also the rate for agent commission

5% means no ITC — the trade-off

Under the 5% concessional scheme, ITC is blocked on all inputs — hotel bills, transport, air, guide fees and vehicle hire become an embedded cost you price into the package. Only the 18% route lets you recover that input GST, so it can work out cheaper on premium tours with heavy input costs.

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Common confusion

Tour Operator vs Travel Agent

The two are taxed very differently. A tour operator arranges and sells a complete packaged tour and is taxed on the whole package value. A travel agent is an intermediary who books travel/hotel/air on your behalf and is taxed only on the commission or service fee.

TravellerBuys a tour or books travel

→

Tour operator5% on full package (or 18% + ITC)

→

Travel agent18% on commission / fee only

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GST returnReport supply & pay the correct rate

A composite package (bundled hotel + transport + meals) is taxed at 5% on the total value — or 18% with ITC.
If you instead book each component separately and bill them individually, each is taxed at its own rate (see the chart above).
A travel agent’s commission — on airline, hotel or ticketing bookings — is always taxed at 18%, not on the full booking value.
One entity can be both: 5% (or 18%) on the package portion, 18% on any commission portion.

Worked example

How GST Adds Up — ₹1,00,000 Package

5% Composite package (no ITC)

Package value₹1,00,000

GST @ 5%₹5,000

Customer pays₹1,05,000

18% With full ITC

Package value₹1,00,000

GST @ 18%₹18,000

Less: ITC on inputsrecoverable

Customer pays₹1,18,000

On the 18% route the headline price is higher, but the operator recovers input GST as ITC — so on a premium tour packed with high-GST hotel and air bills, the net cost can be lower than the 5% no-credit route.

Selling packages and earning commission? Get your GST invoicing structured correctly.

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Cross-border

GST on Foreign & International Tour Packages

When an Indian tour operator sells an international package to an Indian customer, the supply is treated as occurring in India (supplier and recipient both in India). The full package value — including the foreign land portion — is taxable at 5% (or 18% with ITC). There is no zero-rating because the recipient is in India.

Taxable in India (5% / 18%)

Indian operator → Indian customer
Outbound package sold to a resident
Foreign hotel & transport included in value
Forex component still part of taxable value

May be zero-rated export

Recipient is a business outside India
Payment received in convertible forex
Place of supply is outside India
LUT filed for export of service

TaxClue Insight

B2B international packages where the recipient is genuinely a foreign company can qualify as export of service (zero-rated) — but only if all export conditions are met and an LUT is on file. Cross-border tour structuring is fact-specific; get it reviewed before you invoice.

Running outbound or inbound tours? Get your place-of-supply and LUT position checked.

Talk to a GST Expert →

Stay compliant

Tour Operator GST Compliance Checklist

Registration is mandatory once aggregate turnover crosses ₹20 lakh (₹10 lakh for special-category states) — and immediately if you make inter-state supplies or sell via an e-commerce platform, regardless of turnover. The composition scheme is not available to tour operators or travel agents.

GST registration (GSTIN)
Correct rate choice (5% no-ITC vs 18% ITC)
Applied consistently across packages
Tax invoice with SAC 9985 / 998552
Separate 18% invoicing for commission
GSTR-1 (outward supplies)
GSTR-3B (monthly / quarterly)
ITC reconciliation (if on 18%)
LUT for export of tour services
Place-of-supply for foreign tours
E-invoicing applicability
GSTR-9 annual return

Don’t mix rates package-to-package

A tour operator should apply one rate consistently — you cannot casually switch between 5% (no ITC) and 18% (with ITC) across packages without careful structuring, or you risk ITC reversals and notices. Decide your route with a GST professional and document it.

Government sourcesRates & notifications: gst.gov.in · CBIC rate finder: cbic-gst.gov.in · Tour operator 5% no-ITC scheme: Notification 11/2017-CT(R), SAC 9985 · GST 2.0 hotel & air rationalisation effective 22 September 2025

Frequently Asked Questions

Rates & Slabs

What is the GST rate on a tour package in India?

A tour operator selling a composite/inclusive tour package (hotel + transport + meals + sightseeing bundled for one price) charges 5% GST on the total package value with no Input Tax Credit. This applies to both domestic and international composite packages. Alternatively the operator may opt to charge 18% with full ITC. If components are booked and billed separately instead, each is taxed at its own applicable rate.

Is GST 5% or 18% on tour packages?

Both are valid — it is the operator’s choice. The concessional route is 5% on the whole composite package with no ITC, ideal for budget and mid-range tours. The alternative is 18% with full ITC, which can be cheaper net-of-credit for luxury tours carrying heavy input GST on hotels and air. The rate must be applied consistently.

Did GST 2.0 change the tour package rate?

The tour-operator scheme itself (5% without ITC or 18% with ITC under SAC 9985) was not changed by the GST 2.0 rationalisation effective 22 September 2025. However, GST 2.0 changed the rates on components a package bundles — hotel rooms up to ₹7,500 moved from 12% to 5% (no ITC), and business/premium air tickets moved from 12% to 18% (economy stays 5%).

What is the SAC code for tour operator services?

Tour operator services fall under SAC heading 9985, with the more specific SAC 998552 used for tour operator/package booking services. The tax invoice for a composite package should mention the SAC and clearly state whether it is taxed at 5% without ITC or 18% with ITC.

Operator vs Agent

What is the difference between a tour operator and a travel agent for GST?

A tour operator arranges and sells complete package tours and is taxed on the whole package value at 5% (no ITC) or 18% (with ITC). A travel agent is an intermediary who books travel, hotels or airlines on a client’s behalf and is taxed at 18% only on the commission or service fee — not on the full booking value. One entity can be both, applying 5%/18% to the package portion and 18% to the commission portion.

What is the GST rate on travel agent commission?

A travel agent’s commission or service fee is taxed at 18% GST under SAC 9985. Importantly, the 18% applies to the commission/fee earned, not to the full value of the flight or hotel booked. Travel agents on the 18% rate can claim ITC on their eligible business inputs.

ITC

Can a tour operator claim ITC on inputs?

Under the 5% concessional scheme, ITC is blocked on all inputs — hotel bills, transport, air, guide fees and vehicle hire. To claim full ITC, the operator must instead opt for the 18% rate. This makes financial sense when input costs are high, such as luxury tours where hotel and air bills carry substantial GST. Operators should apply one route consistently.

Is the 18% ITC route ever cheaper than 5%?

Yes, on high-cost tours. At 5% you charge less but absorb all input GST as a cost; at 18% you charge more but recover input GST as credit. On a premium tour packed with ≥₹7,500 hotel rooms and business-class air (both attracting 18% input GST), the credit recovered can outweigh the higher headline rate, making the 18% route cheaper net-of-credit.

Foreign Tours

How is GST calculated on a foreign / international tour package?

When an Indian tour operator sells an international package to an Indian customer, the supply is considered to occur in India, so the full package value — including the foreign hotel and transport portion and any forex margin — is taxable in India at 5% (or 18% with ITC). There is no zero-rating because the recipient is in India. Only genuine B2B exports to a recipient outside India can be zero-rated.

Are inbound tours for foreign tourists taxable in India?

Yes. An inbound tour arranged in India (hotels, transport, sightseeing within India) is a supply performed in India and is taxable here — generally at 5% as a composite package or the components’ own rates. Zero-rating as export of service is narrow and depends on the recipient being located outside India and other export conditions being met.

Registration

Is GST registration mandatory for tour operators and travel agents?

Registration is mandatory once aggregate turnover crosses ₹20 lakh (₹10 lakh for special-category states). It is also mandatory regardless of turnover if you make inter-state supplies or sell through an e-commerce operator such as an online travel platform. Once registered, you file GSTR-1 and GSTR-3B and the annual GSTR-9.

Can a tour operator opt for the composition scheme?

No. The composition scheme is not available to tour operators or travel agents — service providers face a much lower composition eligibility limit and the scheme is excluded for inter-state suppliers and e-commerce sellers, which most travel businesses are. Tour operators must register under the regular scheme and choose the 5% no-ITC or 18% with-ITC route.

Do I need an LUT for international tour services?

A Letter of Undertaking (LUT) is needed only where you supply zero-rated export services without paying IGST — for example a genuine B2B tour service to a recipient outside India. Outbound packages sold to Indian customers are taxable in India and do not use an LUT. Get your place-of-supply position confirmed before relying on export treatment.

Components

What GST applies to hotels and flights inside a tour?

When billed separately, hotel rooms from ₹1,001 to ₹7,500 per night attract 5% (no ITC) and rooms above ₹7,500 attract 18% (with ITC) after GST 2.0; economy air tickets are 5% and business/premium class 18%. Inside a 5% composite package, though, the whole bundle is taxed at 5% and these component rates become blocked input costs rather than separate charges.

What is the GST on a cab or taxi hired for a tour?

Renting a cab or taxi for passenger transport is generally taxed at 5% without ITC on the fuel-inclusive rate. When it is bundled inside a composite tour package, it forms part of the single package supply taxed at 5% (or 18% on the ITC route) rather than being billed as a separate line.

Invoicing

How should a tour operator raise a GST invoice?

Issue a tax invoice showing the SAC (9985 / 998552), the package value and the GST clearly at either 5% without ITC or 18% with ITC — chosen consistently. Any commission earned as a travel agent should be invoiced separately at 18%. Keep documentation of your rate choice and reconcile ITC in GSTR-2B if you are on the 18% route.

Done-for-you

Related TaxClue Services

GST RegistrationRegister your tour or travel business and get your GSTIN online.Explore →GST Return FilingMonthly GSTR-1 & 3B with correct 5%/18% classification, done for you.Explore →ITC ReconciliationClaim eligible input credit on the 18% route and avoid reversals.Explore →HSN / SAC & Rate FinderConfirm the right SAC and rate for every travel service you bill.Explore →

Next in this GST cluster

GST on Travel Agent GST on Hotel Rooms GST on Air Tickets GST Calculator HSN / SAC Codes & Rates Input Tax Credit Rules

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