Blog·Finance & GST·November 2026

GST on Tour Packages: A Simple Guide for Travel Agents

All rates checked on November 5, 2026, against official sources.

GST is not just your accountant's job. As a travel agency owner, you should know the rates and rules that apply to you, so you can bill your customers correctly.

Travel agents in India handle many tasks. They book flight tickets, hotels, cabs, and full tour packages (domestic and international). Each service may follow different GST rules.

When a customer books a tour package, they may see GST on your website or app. You should be able to explain this tax if they ask. For that, you need to understand GST on tour packages.

This guide will help you do just that.

What Is GST on Tour Packages?

It is the tax a travel agent charges on tour services. It applies to services like tour planning and organized holiday packages.

If you are new to this, let's start with the basics.

GST Basics for Travel Agents

GST is an indirect tax charged on goods and services. There are three main GST types you should know:

• Central GST (CGST): The Central Government collects it on sales made within a state.
• State GST (SGST): The State Government collects it on sales made within a state. It is charged along with CGST.
• Integrated GST (IGST): The Central Government collects it on sales between two states and on imports.

GST for travel agents depends a lot on input tax credit (ITC). ITC is a credit you can claim to lower the tax you pay.

Businesses pay GST when they buy goods and services from suppliers. This is called input tax. They also charge GST on the services they sell. This is called output tax.

ITC lets you pay GST only on the difference between your output tax and input tax.

Say you pay ₹6,000 as GST when buying services from a supplier. The GST on your own services is ₹10,000. If you claim ITC, you only need to pay ₹4,000 as tax.

However, ITC is not allowed on every purchase. Make sure your business is eligible before you claim it.

Every service under GST has its own Services Accounting Code (SAC). The Central Board of Indirect Taxes and Customs (CBIC) has set these six-digit codes. You can look them up on the official GST portal.

For example, the SAC for tour operator services is 998555. The SAC for transport booking services (like air and rail tickets) is 998551. Always check these codes before billing.

GST registration is an important part of setting up a travel agency. It is compulsory if your yearly turnover is over ₹20 lakhs. In some special category states, such as those in the North East, this limit is ₹10 lakhs.

Our guide on How to Start a Travel Agency in India explains the simple steps to set up your business, including GST registration.

GST Rate for Travel Agency Services

The GST rate for a travel agency depends on what it sells. Tour packages, ticket bookings, and hotel bookings each have different tax rules.

Tour Packages, Ticket Booking, and Hotel Booking

Here is how the most common travel agency services are taxed:

• GST on Tour Operator Packages (SAC 998555): You can pay 5% without ITC or 18% with ITC. ITC is blocked under the 5% option. It is fully available under the 18% option.
• GST on Air Ticket Booking (SAC 998551): Booking air tickets for a commission attracts 18% GST. ITC is fully available.
• GST on Rail Ticket Booking (SAC 998551): Booking rail tickets for a commission also attracts 18% GST, with full ITC.
• GST on Hotel Booking Commission (SAC 998552): The commission or fee you earn for booking hotels attracts 18% GST, with full ITC. Note that this is different from the GST the hotel charges on the room itself. Hotels charge 5% (without ITC) on rooms up to ₹7,500 a night, and 18% (with ITC) on rooms above ₹7,500 a night.

5% vs 18% GST on Tour Operator Packages

You can pay 5% or 18% GST, based on ITC and the conditions that apply to you.

How to Make the Right Choice

Here is how each option affects your costs and taxes:

1. 5% Without ITC

If you pay 5% GST, you cannot claim ITC. There is one exception. You can claim ITC on tour operator services you buy from another tour operator. This option suits agencies with low input taxes.

Your invoice must clearly say that the package price is the full (gross) amount. It must also include the stay and transport costs of the tour.

2. 18% With ITC

You pay 18% GST if you want to claim ITC. This option suits agencies with high input taxes. If your business purchases are high, this option may save you money.

Claiming ITC also means keeping proper invoices. Make sure you meet all GST conditions. Ask your Chartered Accountant which option suits your agency best.

Your choice should depend on how much tax you pay on business purchases. Paying 5% GST is not always better if your input taxes are high.

GST for Travel Agents Who Earn Commission

For agents who earn commission, GST depends on the services they offer and the valuation rules that apply.

Some travel agents do not have to pay GST on the full tour cost. They pay tax only on their service fee or commission.

These agents are called pure agents.

Becoming a Pure Agent Under GST

A pure agent is a service provider who pays third parties on behalf of a client. The client then pays the agent back.

Say you book a tour package for a client. The hotel costs ₹10,000 and your service fee is ₹2,000.

If you are not a pure agent, you bill your client ₹12,000 in total. The hotel room is booked in your agency's name.

You then pay GST on the full ₹12,000.

If you are a pure agent, you pay the hotel ₹10,000 on your client's behalf. The booking is made in your client's name. You then bill your client ₹2,000 as your fee and ₹10,000 as the hotel cost, at actuals.

Here, you pay GST only on ₹2,000.

To become a pure agent, you must set up your transactions the right way. You must also meet the conditions of Rule 33 of the CGST Rules.

Check everything with your CA to be sure.

Here are the conditions you must meet:

• Your terms of service, booking forms, or emails must allow you to pay on your client's behalf.
• All bills must be in your client's name, not your agency's name.
• You cannot use any of these services yourself.
• You must charge your client exactly what you paid the third party. Any extra profit must be shown as part of your taxable service fee.

GST Invoices for Travel Agencies

Your GST invoice must show the correct details of your services and taxes. Missing details can cause accounting problems.

Again, always talk to your CA at every stage.

What Should You Show on an Invoice?

Add these details to your invoice:

• Name, address, and GSTIN of your agency
• Invoice number and date
• Client name (and other needed details)
• SAC and service description
• Taxable value
• GST rate
• Place of supply

A correct invoice makes it easier to check booking details later. Make sure you add the place of supply wherever the law asks for it.

A good CRM can make GST invoicing easy for travel agencies. LuxuryOS helps travel agents create GST and non-GST invoices in a few simple clicks. It shows CGST, SGST, or IGST wherever they apply.

LuxuryOS is built as a travel agency CRM and management software. It exports your monthly GST invoices in GSTR-1 CSV format.

Get one platform to manage GST invoicing, leads, and much more.

See GST Invoicing in LuxuryOS →

Get Your GST Right on Every Booking

Whatever your agency type or services, getting GST right is not hard. Keep a record of every transaction and follow the rules that apply to you.

Focus on these three things the most:

• Check the exact rate for every service you provide.
• Discuss the 5% and 18% options with your CA.
• Add all the needed details to your invoice.

LuxuryOS makes all these steps easier, faster, and digital. Track payments, manage clients, and handle invoices on one platform.

Book a free demo to get started.

Frequently Asked Questions

Is GST applicable on international tour packages?

Yes. GST generally applies when an Indian agency sells an international tour package to a traveler in India. The exact tax depends on the place of supply rules, so check with your CA.

Can I claim ITC at 5%?

In most cases, no. ITC is blocked under the 5% option. The only exception is tour operator services you buy from another tour operator. Ask your CA to check if your purchases qualify.

What is the SAC for tour operator services?

The SAC for tour operator services is 998555.

Do travel agents pay GST on the full ticket price?

It depends on how the booking is set up. For example, a pure agent (if eligible) pays GST only on their service fee.