GST and TCS for travel agents in India – a plain-language guide
When to charge 5% or 18% GST, how TCS works on overseas tour packages, and how to avoid the common invoicing mistakes.
Just Travel India Team · · 3 min read
GST and TCS are the two topics that confuse travel agents the most. This guide explains the basics in simple words. Rates and thresholds change, so always confirm with your chartered accountant before filing.
Two ways to charge GST on tour packages
1. Package (composite) basis – 5% GST without input tax credit. You bill the customer one all-inclusive price for the tour (hotels, transport, sightseeing). GST is charged at 5% on the full package value, but you cannot claim input tax credit on hotel and transport bills.
2. Service-fee (agent) basis – 18% GST on your commission. You act as a pure agent: the customer pays the hotel and transport costs at actuals, and you charge GST at 18% only on your service fee or markup.
Most small agencies selling holiday packages use the 5% package basis because it is simpler. Choose one approach per booking and show it clearly on the invoice.
CGST + SGST or IGST?
- Customer in the same state as your registration → split the GST into CGST and SGST (for example 2.5% + 2.5%).
- Customer in another state → charge IGST (for example 5%).
Your invoice must show the place of supply, your GSTIN and – for business customers – their GSTIN.
TCS on overseas tour packages
When you sell an overseas tour package to a customer, you must collect TCS (tax collected at source) under section 206C(1G) of the Income Tax Act, on top of the package price and GST, and deposit it with the government. The rate depends on the amount the customer spends on overseas packages in the financial year, and on whether they have a PAN. Collect the customer's PAN for every overseas booking.
Domestic packages (Goa, Kashmir, Kerala) do not attract TCS.
Common mistakes
- Mixing package and service-fee methods on the same invoice.
- Forgetting TCS on Dubai, Thailand or Europe packages.
- Wrong invoice numbering across financial years (numbering should restart or follow a clear series each April).
- Issuing a new invoice instead of a credit note when a booking is cancelled.
How software helps
A good travel agency system applies the right GST split, adds TCS automatically on overseas packages, numbers invoices by financial year and creates credit notes on cancellation – so your CA receives clean reports.
Just Travel India does all of this out of the box, with rates kept in configuration rather than hard-coded. See how GST invoicing works.