Under service tax regime tour operator gets abatement            on service tax rates, but now in GST there is no abatement on any services. In GST, Fixed Rate is specified & accordingly GST should be required to be charged without any abatement.

 Meaning of Tour operator:

The expression “tour operator” is defined in entry No. 23 of notification No. 11/2017-Central Tax (Rate) dated 28.6.2017 as under:-

“Tour operator” means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sight-seeing or other similar services) by any mode of transport and includes any person engaged in the business of operating tours”.

The above definition was already there in the service tax notification No. 26/2012-ST dated 20.6.2012 and there is no change whatsoever in the definition of tour operator.

GST RATE: Tour Operator either charge 18% or 5% of GST rate depend upon the conditions mentioned in act are satisfied or not.

Following are conditions for 5% GST rate :

  • Input Tax Credit on goods and services used in supplying output services of tour operator has not been taken.
  • 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.
  • Such narration can be given by way of footnote in the invoice.

If above conditions are not satisfied then 18% is required to be charged by the Tour Operator.

CAN ITC BE CLAIMED ? Tour operators will not claim CGST, SGST and IGST charged by hotels, transporters, airlines, restaurants, travel agents, guide, house boats, cruise ships, monument entry fees, joy rides etc. as input tax credit.

Note: If Tour operator avail any services from another Tour Operator as input service then ITC on such input services which is similar to his output can be taken.

SAC CODE: SAC Code for tour operator is 9985.