GST on travel packages is one of the most confusing topics for Indian travel agents. This guide covers everything you need to know - which slab applies, when TCS kicks in, and how to calculate the final price correctly.
GST slabs for travel services
5% GST - Tour operator services
The most common rate for travel agents. Applies to:
- Package tours (domestic and international)
- Hotel accommodation booked as part of a package
- Transport arranged as part of a package
Important: At 5% GST, you cannot claim input tax credit (ITC) on your inputs. This is the trade-off for the lower rate.
12% GST - Hotel accommodation (standalone)
Applies to hotel rooms priced between ₹1,000 and ₹7,500 per night when booked standalone (not as part of a package).
18% GST - Business class and luxury services
Applies to:
- Business class air tickets
- Hotel rooms above ₹7,500 per night (standalone)
- Luxury services
TCS - Tax Collected at Source
TCS applies to overseas (international) tour packages.
TCS rate: 2% on the package value
Example:
- Package cost: ₹9,00,000
- TCS applies on: ₹9,00,000 (full package value)
- TCS amount: ₹18,000 (2% of ₹9,00,000)
The client can claim TCS as a credit when filing their income tax return.
How TripDraft handles GST and TCS
TripDraft's costing engine has a GST slab selector (5%, 12%, 18%) and a TCS toggle. When you enter the vendor cost and markup, TripDraft automatically calculates:
- Base cost (vendor cost in INR)
- Markup amount
- Selling price (base + markup)
- GST on selling price
- TCS (if international)
- Grand total
- Per-adult and per-child breakdown
The agent's margin is never shown to the client - only the final price.
Common mistakes to avoid
- Applying 18% GST to all packages - Most packages qualify for 5%
- Forgetting TCS on international packages - This is a compliance requirement
- Not issuing a GST invoice - Required for all B2B transactions
- Mixing GST rates - If a package includes both 5% and 18% components, calculate separately
GST invoice requirements
Every GST invoice must include:
- Your GSTIN
- Client's GSTIN (for B2B)
- Invoice number and date
- HSN/SAC code (9985 for tour operator services)
- Taxable value and GST amount separately
- Total amount
TripDraft generates GST invoices automatically for Pro plan subscriptions. For client invoices, use the Invoice template in the Templates section.
Conclusion
GST compliance is not optional - it is a legal requirement. The good news is that once you understand the slabs and set up your costing correctly, it becomes routine. TripDraft's costing engine handles the calculations automatically so you can focus on selling.