GST on Tour Package — 5% Composite Rate, ITC Rules & Foreign Tours
Updated: 3 June 2026 | CGST Act | SAC 9985 — Tour Operator Services
GST on composite tour packages (hotel + transport + meals bundled): 5% GST with no ITC. Travel agent commission: 18% GST. Foreign/international tour packages sold to Indian customers: 5% on full package value. Air tickets: 5% economy, 12% business (airline's liability). Hotel room tariff: hotel pays GST directly at 12%/18%.
5% GST
Tour operator composite package rate — domestic and international inclusive tours.
No ITC available under 5% scheme. Operators may opt for 18% + full ITC for high-cost luxury tours. Travel agent service fee: always 18% GST.
No ITC available under 5% scheme. Operators may opt for 18% + full ITC for high-cost luxury tours. Travel agent service fee: always 18% GST.
GST Rate Chart — Tour Package and Travel Services
| Service | GST Rate | SAC | ITC Available |
|---|---|---|---|
| Composite domestic tour package | 5% | 9985 | No (blocked) |
| Composite international tour package | 5% | 9985 | No (blocked) |
| Tour operator (18% optional route) | 18% | 9985 | Yes (full ITC) |
| Travel agent commission / service fee | 18% | 9985 | Yes |
| Air ticket — economy | 5% | 9964 | Yes (business use) |
| Air ticket — business class | 12% | 9964 | Yes (business use) |
| Hotel (₹1,000–₹7,499/night) | 12% | 9963 | Yes |
| Hotel (≥₹7,500/night) | 18% | 9963 | Yes |
| Bus transport (contract carriage) | 5% / 12% | 9964 | Varies |
| Cab/taxi hired for tour | 5% | 9964 | Blocked for personal use |
| Guide services | 18% | 9985 | Yes |
| Visa and travel documentation fee | 18% | 9985 | Yes |
Frequently Asked Questions
What is the GST rate on a tour package in India?
GST on tour packages: Tour operator selling a composite/inclusive tour package (hotel + transport + meals + sightseeing bundled): 5% GST on total package value. No Input Tax Credit (ITC) is available under this scheme. This rate applies to both domestic and international tour packages when sold as a composite supply. If the tour operator does not offer a composite package and instead books each component separately and bills them individually, each component is taxed at its own applicable GST rate (hotel: 12%/18%, transport: 5%/18%, meals: 5%/18%).
What is the difference between a tour operator and a travel agent for GST purposes?
Key GST distinction: Tour operator: arranges and sells complete package tours (all-inclusive). Taxed at 5% on composite packages (no ITC). Defined under GST notifications as a person who arranges packaged tours. Travel agent: acts as an intermediary, books travel/hotel/airline on behalf of clients and earns commission. Taxed at 18% GST on commission/service fee. An entity can be both — 5% applies to the tour package component; 18% applies to the commission component of individual bookings. The distinction matters for GST invoicing and ITC claims.
Can a tour operator claim ITC on inputs?
Under the 5% concessional tour operator scheme: ITC is blocked on all inputs — hotel bills, transport costs, guide fees, vehicle hire. This is an explicit restriction under CGST Rules, Notification 11/2017. Alternative: a tour operator can opt to pay 18% GST instead and claim full ITC. This makes financial sense when input costs are high (luxury tours where hotel bills with 18% GST are substantial). Tour operators must consistently apply one rate — they cannot mix 5% no-ITC and 18% ITC for different packages without careful structuring. Consult a GST CA to determine optimal rate.
How is GST calculated on a foreign/international tour package?
International tour package GST: When an Indian tour operator sells an international package to an Indian customer: the supply is considered to occur in India (supplier in India, recipient in India). Full package value is taxable at 5% GST in India. The foreign land portion (hotels/transport abroad) is included in the taxable value. No zero-rating benefit since the recipient is in India. Foreign exchange component: still part of taxable value. B2B international packages where recipient is a foreign company: may qualify as export of service (zero-rated) — recipient must be outside India. Consult a GST professional for cross-border tour structuring.
Is GST registration mandatory for tour operators and travel agents?
GST registration requirements: Turnover > ₹20 lakh: mandatory GST registration (₹10 lakh for special category states). Inter-state services (selling tours across states): mandatory registration regardless of turnover amount. OTA platforms (MakeMyTrip, Goibibo) acting as e-commerce operators: mandatory registration. Composition scheme: NOT available for tour operators or travel agents — composition is excluded for service providers above ₹50L and for any inter-state service. Once registered, tour operators must file monthly/quarterly GSTR-1 and GSTR-3B. Annual GSTR-9 also required. LUT (Letter of Undertaking) needed for zero-rated export of tour services.
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