GST implication on travel agent

  1. IATA agent

An Air Travel Agent earns two types of income:

  1. Commission from the Airlines for booking of air tickets;
  2. Income in the form of processing fees or handling charges etc. from the client for whom he books the tickets.


Alternative 1 (General Module)

Such Air Travel Agent shall be raising below 2 types of invoices:

  1. On the Airlines for commission for selling its Air tickets;
  2. On the client for its processing fees/ service charges / facilitation charges.

As a general rule, air travel agents are required to pay 18% GST on commission earned from airlines and also service charges, handling charges etc. collected from the customers.

There is no bar on air travel agents in availing ITC on input services to support the output services of travel agents.

Alternative 2 (Basic fare Module)

As per rule 32(3) of CGST Rules, the value of supply of services in relation to booking of tickets for travel by air provided by an air travel agent, shall be deemed to be an amount calculated at the rate of:

  1. 5%of the basic farein the case of domestic bookings, and
  2. 10%of the basic farein the case of international bookings
Type of BookingBasic fare (assumed) Rs.Effective Value (Rs.)GST Payable (Rs.)
Domestic10,000 /-500 /- (@ 5%)90/- (18%)
International10,000 /-1,000 /- (@ 10%)180/- (18%)


He is not required to pay GST separately on commission, if any, received from the airlines as well as service charges / booking charges / management charges from the customer / passenger.

GST @ 5% /10% has been applied on services of tour operator without benefit of Input Tax Credit (ITC) on goods and services. 5% GST will be payable on the gross amount charged by the tour operator from the customer. This GST is uniform for all services – package tours, hotel accommodation only etc.

GST will be applicable @5% / 10% with no ITC

The concessional GST rate of 5% is subject to meeting the following conditions:-

(i) Input Tax Credit on goods and services used in supplying output services of tour operator has not been taken.

(ii) The invoice / bill issued for supply of output service indicates that it is inclusive of charges of accommodation and transportation required for such a tour. This narration can be given by way of footnote in the invoice.

In case any of the above conditions are not met, the benefit of concessional rate of 5% would not apply and in that event the Department may demand full 18% GST from the tour operator.


In case an air travel agent buys ticket from IATA agent and charge service charges only from the customer / passenger as his mark-up, such agent is not authorized to work on basic fare module.

He will pay 18% GST on his service charges disclosed separately in the invoice issued by him to the customer.



Rail Travel Agents are required to pay 18% GST on service charges collected from the customers / passengers. No other optional rate is applicable in their case.


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