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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errorsShort answer: A travel business does not get one universal GST treatment. Registration depends on aggregate turnover, location, supply type and compulsory-registration exceptions. Once registered, the business must issue correctly timed tax invoices and maintain records. A qualifying tour-operator service is listed by CBIC at 5% total GST only when its stated conditions are met; an air-ticket agent instead uses a deemed taxable value of 5% of domestic basic fare or 10% of international basic fare. Online booking platforms require a separate analysis of who supplies the service, who receives the money and whether Section 9(5) or Section 52 applies.
This guide explains the Indian rules published by the Central Board of Indirect Taxes and Customs (CBIC). GST notifications and thresholds can change, so verify the current position and your contracts with a qualified GST adviser before filing or charging tax.
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When must a travel agent register for GST?
CBIC’s registration FAQ gives a published baseline of mandatory registration when aggregate annual turnover on a PAN basis exceeds ₹20 lakh, with ₹10 lakh for the special-category states listed in that FAQ. The FAQ is an early GST-era publication and does not by itself establish the threshold that applies to every business in 2026. Check later amendments, the current notification, the state or union territory and the nature of your supplies.
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Facts to establish before deciding
- The legal person, PAN and all business activities that belong to that person.
- Aggregate turnover across relevant taxable, exempt, export and other supplies, calculated under the applicable rules.
- The state or union territory from which each supply is made and where the business is registered or established.
- Whether the business is principal supplier of a package, an agent arranging another supplier’s service, an air-ticket booking agent, or a combination of these.
- Whether any compulsory-registration provision or e-commerce rule applies, even if turnover is below the published threshold.
Do not answer “yes” or “no” from turnover alone. Document the facts, identify the potentially compulsory provision and then confirm the current law.
What does a travel business actually supply?
The classification of the supply drives the invoice, taxable value, rate and input-tax-credit result. A single agency can make several different supplies during one booking.
Principal tour operator
A principal tour operator plans, schedules, organises or arranges a tour and may include accommodation, sightseeing or transport. CBIC’s rate table describes a tour operator in these terms and includes a person operating tours. The operator contracts with the traveller for the package and normally bears responsibility for delivering the promised combination of services.
Agent or arranger
An agent may arrange a hotel, vehicle, activity or ticket supplied by another business and earn a commission or service charge. The underlying supplier, the agent and the traveller can therefore have different supplies and invoices. Do not apply the tour-package entry merely because a booking relates to tourism.
Air-ticket booking service
An air travel agent’s service has a specific valuation rule. It is not automatically the same supply as operating a tour, even when the agent also sells hotels or transfers. Keep air-booking records separate from package records when the business makes both kinds of supply.
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Mixed itineraries
A booking that combines transport, accommodation, sightseeing and agency services needs a review of the contract and how the price is presented. Determine whether the customer bought one qualifying package from the operator or several separately identifiable services. The answer affects classification and valuation.
Tour-operator GST at 5%: conditions matter
CBIC’s rate table lists tour-operator services at 2.5% central tax plus 2.5% state or union-territory tax, 5% in total, subject to express conditions. The entry is not a blanket 5% rate for every travel booking.
| Condition in the CBIC entry | What the operator must check |
|---|---|
| Input tax credit condition | Input tax credit on goods and services used to supply that tour-operator service is not taken. |
| Bill description condition | The bill indicates that accommodation and transportation are included. |
| Gross-charge condition | The bill indicates that the amount charged is the gross amount for the tour, including accommodation and transportation charges. |
Both the commercial facts and the wording on the bill matter. If the business claims input tax credit, bills only a commission, or arranges a supplier’s service without acting as the tour operator, the 5% entry may not be the correct treatment. Verify the applicable rate notification for the exact service before issuing invoices.
Air-ticket agents: taxable value is not the GST rate
CBIC’s valuation rule deems the value of an air travel agent’s ticket-booking service to be:
| Booking | Deemed value of the agent’s service |
|---|---|
| Domestic air ticket | 5% of the basic fare |
| International air ticket | 10% of the basic fare |
These percentages determine the taxable value under the rule; they are not GST tax rates. “Basic fare” means the part of the airfare on which the airline normally pays commission to the agent. Keep the airline fare breakup and commission-related records that support the calculation. Do not multiply the full amount paid by the passenger by 5% or 10% unless that is also the basic fare under the relevant booking documents.
How to make a GST invoice for a tour package
A registered supplier of taxable services must issue a tax invoice containing the particulars prescribed by the invoice rules. For ordinary taxable services, the general deadline is 30 days from the date of supply. Special classes and continuous supplies have different timing provisions, so identify the supply before applying the 30-day rule.
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- Identify the supplier. Decide whether your entity is supplying the package, arranging another supplier’s service, or providing air-ticket booking. Use the correct legal name and GST registration for that supplier.
- Determine the classification and valuation. Check whether the tour-operator entry, air-agent valuation rule or another provision applies. Record the reasoning and any conditions, such as the no-input-tax-credit requirement.
- Create a unique invoice number. Use a consecutive, unique serial number for the financial year. Do not reuse numbers after cancellation; preserve an audit trail for voided documents.
- Enter supplier particulars. Show the supplier’s legal name, address and GSTIN, together with the invoice date.
- Enter recipient particulars. Include the customer’s name, address and GSTIN where applicable, and any other recipient information required by the rules for the transaction.
- Describe the service. State what was supplied: for example, a specified tour package, an air-ticket booking service or an arranging service. Include the applicable service accounting code.
- Calculate taxable value. For a qualifying tour operator, use the value of the gross tour charge subject to the entry’s conditions. For an air agent, apply 5% or 10% to the documented basic fare, not to the total passenger collection by default.
- Show rate and tax amount. Display the applicable GST rate and amount in the form required for the place and type of supply. The tour-operator entry’s 5% total consists of 2.5% central and 2.5% state or union-territory tax when that entry applies.
- State package inclusions where required. If using the tour-operator entry, make the bill say that accommodation and transportation are included and that the amount is the gross tour amount including those charges.
- Issue on time and reconcile. Deliver the invoice within the applicable deadline, post the amount to the invoice register and reconcile it to receipts, supplier bills and any booking-platform statement.
Advances, cancellations and changes
A tour commonly involves a deposit before travel. The Act provides for a receipt voucher when an advance is received. If the supply does not proceed and the advance must be returned in circumstances covered by the rules, a refund voucher may be required. After an invoice is issued, qualifying price changes, cancellations or corrections may require a credit note or debit note. The exact document and tax adjustment depend on what happened to the booking, so retain the contract, cancellation terms and payment trail.
Online travel agencies and TCS
CBIC’s sectoral FAQ places online travel agents operating through digital or electronic platforms within its discussion of e-commerce operators and says they are liable to deduct tax collected at source (TCS) under Section 52 in the circumstances covered by that provision.
That does not mean every online seller, every booking or every platform has identical TCS treatment. The analysis turns on three questions:
- Who supplies the service? Is the platform the supplier, or is an independent hotel, airline, tour operator or agent supplying it?
- Who collects the consideration? Trace the customer payment, settlement, commission deduction and remittance. The money flow can affect the platform’s reporting role.
- Does a notified Section 9(5) category apply? In specified cases an e-commerce operator pays tax on behalf of suppliers under a notification issued under Section 9(5), producing a different threshold and compliance analysis from ordinary Section 52 TCS.
Read the platform contract and settlement statement together with the current notification. A platform’s label (“marketplace,” “agent” or “merchant”) is not enough to decide the result. The supplier, consideration flow and notified service category must match the legal provision.
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Records every registered travel business should maintain
CBIC’s accounts-and-records rules require relevant registered persons to maintain records of tax payable and collected, input tax, credits claimed, and invoices and adjustment documents. Travel bookings create additional reconciliation risks because a single customer payment can cover several suppliers and later change through cancellation or rebooking.
Minimum practical record set
- An invoice register with serial number, date, customer, supply classification, taxable value, GST rate and tax amount.
- Receipt vouchers for advances and a linked record showing when the final invoice was issued.
- Credit notes, debit notes, refund vouchers and the reason for each adjustment.
- Supplier invoices for hotels, airlines, transport providers and activities, including the fare breakup used for air-agent valuation.
- Booking-platform statements showing gross customer collections, commissions, TCS, refunds and net settlements.
- Evidence supporting any decision not to claim input tax credit when using the tour-operator entry.
- Reconciliations between bank receipts, payment gateways, the booking system and GST returns.
A physical invoice book can be a manual aid for a small operation, but it is not itself a legal requirement and may omit prescribed fields. Billing software can reduce numbering and reconciliation errors at higher volume, yet no tool determines whether a supply is a tour package, agency service or air-agent service. The legal classification remains the business’s responsibility.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Common mistakes and how to correct them
Using ₹20 lakh as an automatic safe harbour
Problem: The business treats the published threshold as a universal exemption.
Correction: Recalculate aggregate turnover, check the state, supply type, cross-state activity and compulsory-registration provisions, then verify the current notification.
Calling 5% or 10% the air-agent GST rate
Problem: The agent applies 5% or 10% directly as GST on the passenger’s full payment.
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Correction: Apply the valuation rule to the documented basic fare first; determine the GST rate separately under the applicable law.
Applying the tour-operator entry to every booking
Problem: A commission-only or arranging service is billed as a 5% tour package.
Correction: Establish whether the business is principal, whether accommodation and transportation are included, whether the bill states the gross tour amount and whether input tax credit is being claimed.
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Problem: Deposits, refunds and rebookings are tracked only in the reservation system.
Correction: Link receipt vouchers, invoices, credit or debit notes and refund documents to the booking and preserve the payment evidence.
Assuming a platform always handles GST
Problem: The seller relies on a platform label without checking the contract or settlement report.
Correction: Identify the supplier, payment collector and any notified Section 9(5) category; then determine Section 52 TCS and registration consequences.
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Quick Recap
A transaction-level review checklist
- Confirm the entity, PAN and state of supply.
- Update aggregate turnover and test the current registration threshold and exceptions.
- Map each revenue line to principal tour operation, agency or arranging service, air-ticket booking, or another supply.
- For packages, test every condition attached to the 5% tour-operator entry.
- For air bookings, retain the basic-fare calculation and keep domestic and international bookings distinct.
- For online sales, document who supplies, who collects and whether Section 9(5) or Section 52 applies.
- Issue the correct invoice or voucher within the applicable deadline and include every prescribed field.
- Reconcile invoices, advances, refunds, adjustments, supplier bills and platform statements before filing.
- Have a GST professional review unusual contracts, bundled itineraries and changes in law.
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