GST on Travel Agent & Tour Packages —
18%, 5% or 12%?
The correct GST rate for a travel agent's commission, tour operator packages, air tickets, hotel bookings and OTA convenience fees — updated for the GST 2.0 two-slab structure.
A travel agent's commission or service fee is taxed at 18% (SAC 9985) — GST applies to the agent's margin, not the ticket or room price. An inclusive tour package can be billed at 5% without ITC or (since GST 2.0) 18% with full ITC — the tour operator chooses. Air tickets: 5% economy, 18% premium/business (raised from 12% on 22 September 2025). OTA convenience fees are 18%.
GST Rate for Travel & Tourism Services
The GST rate for every common travel-industry scenario, with the SAC code and ITC position, reflecting the GST 2.0 two-slab structure.
| Service | GST Rate | SAC | ITC |
|---|---|---|---|
| Travel agent commission / service fee | 18% | 9985 | Yes |
| Inclusive tour package — 5% option | 5% | 9985 | No |
| Inclusive tour package — 18% option | 18% | 9985 | Yes |
| Foreign tour — Indian portion | 5% | 9985 | No |
| Air ticket — economy class | 5% | 9964 | — |
| Air ticket — business / premium | 18% | 9964 | — |
| Chartered / helicopter (non-scheduled) | 18% | 9964 | — |
| OTA convenience fee (MakeMyTrip etc.) | 18% | 9985 | Yes |
| Hotel booking commission (agent's margin) | 18% | 9985 | Yes |
| Visa & passport assistance | 18% | 9985 | Yes |
Premium-cabin air tickets moved from 12% to 18% on 22 September 2025. Confirm current rates on the official GST portal before invoicing.
Travel Agent vs Tour Operator — Two Models
GST treats a pure agent (who books flights/hotels and charges a commission) differently from a tour operator (who bundles accommodation, transport and sightseeing into one package price).
Travel agent — tax on commission
- GST only on the commission / service fee
- Ticket & room price pass through untaxed by the agent
- Full Input Tax Credit available
- SAC 9985 — travel arrangement services
- Best when you mainly earn commission
Tour operator — tax on package
- GST on the whole inclusive package value
- 5% without ITC, or 18% with full ITC
- You choose the scheme that suits your margins
- SAC 9985 — tour operator services
- Best for bundled holiday packages
Historically the tour-operator package was a flat 5% with no input credit. Under the current schedule, an operator can instead opt for 18% and claim ITC on hotel bills, coach hire and other inputs. If your input GST is high, the 18%-with-ITC route can work out cheaper than 5%-without-ITC — model both before you decide.
Not sure whether the 5% or 18% tour-operator scheme is cheaper for you?
Get My GST Rate →GST on Air Tickets After GST 2.0
The GST on the air ticket itself is the airline's liability and is built into the fare shown at checkout. From 22 September 2025, premium cabins moved from 12% to 18%; economy is unchanged at 5%.
- Economy class: 5% — unchanged before and after GST 2.0.
- Business / first / premium economy: 18% — raised from 12% on 22 September 2025.
- The rate is locked by the booking-and-payment date, not the travel date, so premium tickets paid on or before 21 September 2025 stayed at 12%.
- A travel agent's convenience fee on top of the ticket is always taxed at 18% as a separate service.
Booking flights and hotels for clients? Get your commission GST and ITC set up right.
GST on Air Tickets →GST for OTAs like MakeMyTrip & Cleartrip
An Online Travel Agency earns a commission or markup from airlines and hotels and charges a convenience fee to the traveller. Its bill typically shows the ticket / room price (with the supplier's own GST) plus an 18% convenience fee.
18% Agent commission on a booking
5% Domestic tour package
On an OTA booking, the airline or hotel accounts for GST on the ticket/room, while the OTA pays 18% on its own commission and convenience fee. A GST-registered business traveller can claim ITC on the 18% shown on the OTA service fee.
If you bill an inclusive package at 5%, GST paid on hotel rooms, bus hire, guides and other inputs is a sunk cost you must price into the package — there is no credit. Only the 18% tour-operator option (or the commission-based agent model) lets you recover input GST.
Selling packages online? Get your OTA payouts reconciled with your GST returns.
Get GST Return Filing →GST Registration for Travel Agents
Registration is mandatory once aggregate turnover crosses ₹20 lakh (₹10 lakh in special-category states). Agents making inter-state supplies or selling through an e-commerce operator generally need to register regardless of turnover. The composition scheme is not available to travel-service providers.
| Situation | Register? | Reason |
|---|---|---|
| Turnover above ₹20 lakh | Yes | Standard service threshold |
| Inter-state tour / booking supplies | Yes | Inter-state supply — no threshold benefit |
| Supplying via an ECO platform | Yes | ECO supplier registration |
| Local commission income below ₹20L | No* | Below threshold — voluntary registration optional |
* Voluntary registration is still allowed and often useful to claim ITC on office rent, software and vehicles.
- GST registration (GSTIN)
- Correct SAC & rate classification
- Tax invoice on commission / package
- Choose 5% vs 18% tour scheme
- OTA payout reconciliation
- GSTR-1 (outward supplies)
- GSTR-3B (monthly/quarterly)
- ITC on office rent, software, vehicles
- E-invoicing applicability
- GSTR-9 annual return
Many travel businesses mix models — commission on some bookings, bundled packages on others. The GST treatment differs per stream, so keep commission income (18%) separate from package turnover (5% or 18%) in your billing to avoid mis-classification and notice risk.
Frequently Asked Questions
Related TaxClue Services
Next in this GST cluster
Running a Travel Agency or Tour Operation?
Get your GST registration, 5%-vs-18% scheme choice, OTA reconciliation and monthly compliance handled by TaxClue's CA-led team — 100% online, across India.