Tour operator or agent
GST law defines a tour operator as anyone in the business of planning, scheduling, organising or arranging tours, which may include accommodation, sightseeing and similar services, by any mode of transport. If you sell a package at one price, with the hotel, the car and the sightseeing inside it, you are acting as a tour operator for that trip.
An agent who only books a hotel or a ticket for the customer and earns a commission or charges a fee is selling a different service: the booking itself. That fee is taxed on its own, as below.
5% on the gross package, without input tax credit
Notification 11/2017-Central Tax (Rate), serial 23, sets tour operator services at 2.5% CGST, plus 2.5% SGST, so 5% in all (or 5% IGST when the place of supply is another state). Two conditions apply:
- You take no input tax credit on the goods and services used to supply the tour, such as the GST on the hotel and the car you buy.
- Your bill states that it includes the charges for accommodation and transportation for the tour, and the amount on the bill is the gross amount.
Most small agencies that sell packages bill this way, because it is simple: GST at 5% on the full price, and no credit to track.
18% with input tax credit
If you do not meet the conditions for 5%, the service falls under other support services at 9% CGST plus 9% SGST, 18% in all, and you can claim input tax credit on the GST you paid your suppliers. This can suit an operator whose suppliers are mostly GST registered and who buys at scale, because the credit offsets much of the higher rate.
Side by side
| 5% without credit | 18% with credit | |
|---|---|---|
| GST on | The gross package amount | The value of your service |
| Input tax credit | Not allowed | Allowed |
| What the bill must say | It includes accommodation and transport, and the amount is the gross amount | The usual tax invoice details |
| Record keeping | Simpler | Credit on every supplier bill to match and claim |
| Source | Notification 11/2017-CT(R), serial 23, tour operator services | Notification 11/2017-CT(R), serial 23, other support services |
A worked example
An example only, with made-up numbers. A family buys a Kerala package for ₹1,05,000 including GST, and the agency bills 5% on the gross amount.
| 5% on the package, GST inside the price | Amount |
|---|---|
| Package price, including GST | ₹1,05,000 |
| Taxable value (₹1,05,000 ÷ 1.05) | ₹1,00,000 |
| CGST at 2.5% | ₹2,500 |
| SGST at 2.5% | ₹2,500 |
| The customer pays | ₹1,05,000 |
Whether 18% with credit would leave the agency better off depends on how much GST its suppliers charged. That is a sum to do with your CA on a few real trips, not a rule of thumb.
When you charge a service fee instead
Some agencies pass the hotel and transport through at cost and charge the customer a separate service fee. GST then applies to that fee as a support service, at 18%, not to the whole trip. The invoice shows the fee as the taxable value. Keep the pass-through costs clearly separate, and settle with your CA whether your arrangement allows it.
CGST and SGST, or IGST
When the place of supply is in the same state as your GSTIN, the tax splits equally into CGST and SGST (or UTGST). When it is in another state, the whole rate is IGST. The invoice names the place of supply with its state code, for example Gujarat (24).
How Triplli handles it
In Triplli you pick the basis on each invoice, GST on the full package or GST on your service charge, and type the rate. GST sits inside the price you quoted, so the customer pays what you agreed; the taxable value is worked back from the total. The invoice prints CGST and SGST or IGST from the place of supply you pick. See GST and TCS invoices in Triplli, or use the invoice format guide and its free template.
Sources
- Notification 11/2017-Central Tax (Rate), 28 Jun 2017, serial 23, heading 9985, as amended (cbic-gst.gov.in).
- Notification 15/2025-Central Tax (Rate), 17 Sep 2025, in force from 22 Sep 2025.
This describes the law as of 28 Sep 2026, from the sources named on this page. It is not tax advice. Rates change with the Budget and the GST Council, so confirm with your CA before you invoice.
