April 22, 2026
GST Invoicing for Travel Agencies in India — Complete 2026 Guide (Rates, SAC Codes, TCS, and How to Automate It)
GST rates for Indian travel agencies in 2026 — 5% vs 18%, SAC codes, TCS on overseas packages, mandatory invoice fields, and how to automate it all. Complete guide.
Disclaimer: This guide is for informational purposes only and reflects GST rules effective from September 22, 2025. GST law is subject to change. Please verify the applicable rates and rules with a Chartered Accountant for your specific business model before issuing invoices or filing returns.
What is the GST rate for travel agencies in India?
Effective September 22, 2025: tour packages attract 5% GST without Input Tax Credit (ITC), or 18% GST with ITC — the operator chooses. Commission and service fees earned by travel agents as intermediaries are taxed at 18% GST. TCS of 5% applies to overseas packages up to ₹7 lakh per person per year; 20% beyond that. GST registration is mandatory once annual turnover exceeds ₹20 lakh.
Ask ten Indian travel agents what GST rate they charge and you will likely get five different answers — not because they are wrong, but because GST for the travel industry is genuinely more nuanced than GST for most other businesses.
The rate you charge depends on whether you are acting as a tour operator selling packaged holidays, a pure agent facilitating bookings on behalf of a client, or a commission-based intermediary earning from airlines and hotels. Each model attracts different rates, different ITC rules, and different invoicing requirements.
This guide cuts through the complexity. By the end, you will know exactly which rate applies to your business model, what to put on every invoice, how TCS works for international packages, and how a Travel CRM like TripClap automates the entire invoicing process so your team never has to manually calculate GST again.
First — which business model are you?
Under GST, travel businesses are not all treated the same. The three most common operating models in India, and how GST applies to each:
| Model | What this means | GST rate | ITC available? |
|---|---|---|---|
| Tour Operator (Principal) | You sell packaged holidays as your own product — flights, hotels, transfers all bundled under one invoice in your name | 5% on total package value (no ITC) OR 18% on total package value (with ITC) | 5% option: No ITC on hotels, flights, transfers. 18% option: ITC available on rent, professional fees, telecom, etc. |
| Pure Agent (Intermediary) | You facilitate bookings on behalf of the client — actual hotel/flight costs pass through to the client; you charge only your service fee | 18% GST on your service fee / commission only — not on the pass-through costs | Yes — ITC on your business expenses (rent, utilities, telecom, etc.) |
| Commission Agent | You earn commissions from airlines, hotels, or other suppliers for bookings made on behalf of clients | 18% GST on commission income | Yes — ITC on eligible business expenses |
Most Indian travel agencies operate across more than one model — selling some packaged tours as principal, facilitating some bookings as pure agent, and earning commission from airlines. This means your invoice format may differ depending on which type of transaction you are billing for.
GST rates for every travel service — 2026 reference table
Effective from September 22, 2025. Updated for GST 2.0 revisions.
| Service type | GST rate | ITC available? | SAC code |
|---|---|---|---|
| Domestic tour package (all-inclusive) — no ITC option | 5% | No | 998555 |
| Domestic tour package (all-inclusive) — with ITC | 18% | Yes | 998555 |
| International tour package — no ITC option | 5% | No | 998555 |
| International tour package — with ITC | 18% | Yes | 998555 |
| Air ticket booking commission (from airline) | 18% | Yes | 996411 |
| Air ticket service fee (charged to passenger) | 18% | Yes | 996411 |
| Economy class air travel (on ticket itself) | 5% | No | 996411 |
| Business class air travel (on ticket itself) | 12% | No | 996411 |
| Hotel booking commission (from hotel) | 18% | Yes | 996311 |
| Hotel rooms ≤ ₹7,500/night | 5% | No | 996311 |
| Hotel rooms > ₹7,500/night | 18% | Yes | 996311 |
| Car rental / cab with driver (without ITC) | 5% | No | 996601 |
| Car rental / cab with driver (with ITC) | 18% | Yes | 996601 |
| Visa and passport assistance services | 18% | Yes | 998213 |
| Travel insurance commission | 18% | Yes | 997137 |
| Pure agent service fee (intermediary only) | 18% | Yes | 998555 |
SAC codes are mandatory on all GST invoices. Agencies with annual turnover above ₹5 crore must use all 6 digits; below ₹5 crore, 4 digits are sufficient for B2B invoices. Non-compliance can attract penalties of ₹25,000–₹50,000.
The 5% vs 18% decision — which is better for your agency?
This is the most common question from Indian tour operators, and the answer depends on your cost structure. Here is how to think about it:
| Factor | Choose 5% (no ITC) | Choose 18% (with ITC) |
|---|---|---|
| GST collected from client | 5% of package value | 18% of package value — higher for client |
| ITC on hotel costs | Not claimable | Claimable where hotel GSTIN and place of supply rules are met |
| ITC on flight tickets | Not claimable | Claimable on commission/service charge portion |
| ITC on business overheads | Not claimable (rent, telecom, etc.) | Fully claimable — reduces your net tax outflow |
| Net tax outflow | Pay 5% on full package — no offsets | Pay 18% but offset with ITC — net outflow often lower |
| Best for | Agencies with very low overhead costs and high-volume mass-market packages | Agencies with significant business overheads (rent, staff, utilities) and B2B operations |
| Simplicity | Simpler invoicing — one flat rate | More complex — requires careful ITC tracking and reconciliation |
Practical rule of thumb: For most small to mid-sized Indian travel agencies with significant business expenses — office rent, staff salaries, marketing spend — the 18% option with ITC typically results in a lower net GST outflow than the 5% no-ITC option, even though the headline rate is higher. Have your Chartered Accountant model both scenarios against your actual P&L before deciding which to adopt.
TCS on overseas tour packages — what travel agents must collect
Tax Collected at Source (TCS) is separate from GST and applies specifically to international tour packages. Many travel agents confuse the two or miss TCS entirely — which can lead to penalties and client disputes.
| Scenario | TCS rate | Key requirement |
|---|---|---|
| Overseas tour package — amount up to ₹7 lakh per person per financial year | 5% | Collect from buyer at time of booking; deposit to government by 7th of following month |
| Overseas tour package — amount exceeding ₹7 lakh per person per financial year | 20% | The ₹7 lakh threshold is cumulative for the full FY — not per package. Buyer must provide undertaking of prior bookings. |
| Domestic tour packages | Not applicable | TCS does not apply to domestic holidays |
| Individual flight or hotel bookings (not packaged) | Applicable if total exceeds ₹10 lakh in FY | Individual components can attract TCS if total LRS remittance exceeds threshold |
TCS must be shown separately on the invoice — it is not included in the GST amount. The travel agent collects TCS on behalf of the government and deposits it via TAN (Tax Deduction and Collection Account Number) within 7 days of month-end. Quarterly TCS returns (Form 27EQ) must be filed with the government.
TAN registration is mandatory: Every travel operator collecting TCS on overseas packages must register for a Tax Deduction and Collection Account Number (TAN). Failure to collect TCS or deposit it on time attracts 1% interest per month on the outstanding amount. This is a separate requirement from your GST registration.
What must appear on every GST invoice — mandatory fields under Rule 46
A GST invoice that is missing mandatory fields is legally invalid — your client cannot claim ITC on it, and you may face penalties during audit. Under Rule 46 of the CGST Rules, every tax invoice must include the following:
| # | Mandatory field | Travel-specific note |
|---|---|---|
| 1 | Your legal business name, address, and GSTIN | Use the name exactly as registered on the GST portal — not your trading name unless it matches |
| 2 | Invoice number and date | Invoice numbers must be sequential within a financial year — gaps invite scrutiny |
| 3 | Client name, address, and GSTIN (for B2B) | For B2C, GSTIN is not required but the client's state must be identifiable for place of supply |
| 4 | Description of service | Be specific: 'Bali Holiday Package — 6N/7D' not just 'Tour Package' |
| 5 | SAC code | 4 digits for turnover <₹5 crore; 6 digits for ≥₹5 crore. Travel packages: 998555 |
| 6 | Taxable value (amount before GST) | For 5% packages: must state this is the gross amount including accommodation and transport |
| 7 | GST rate applied (CGST + SGST for intrastate; IGST for interstate) | Intrastate: split into 2.5% CGST + 2.5% SGST (for 5%). Interstate: 5% IGST |
| 8 | GST amount (calculated separately) | Show the rupee amount of GST — do not just show the rate |
| 9 | Total invoice value (taxable value + GST + TCS if applicable) | If TCS applies, show it as a separate line item |
| 10 | Place of supply | For tour packages: state where the service is primarily provided or the client's location |
| 11 | Whether GST is payable on reverse charge basis | State 'Reverse Charge: No' explicitly if it does not apply |
| 12 | Signature of authorised signatory | Physical or digital — required for legal validity |
Intrastate vs interstate invoicing — when to use IGST vs CGST+SGST
This trips up a significant number of travel agencies, especially those with clients in different states.
| Intrastate (same state) | Interstate (different states) |
|---|---|
| You are in Maharashtra and your client is in Maharashtra | You are in Maharashtra and your client is in Gujarat or Delhi |
| Use: CGST + SGST (split equally). Example at 5%: 2.5% CGST + 2.5% SGST | Use: IGST (single rate). Example at 5%: 5% IGST |
| Revenue stays within the state tax system | Revenue goes to central government — distributed later to the destination state |
The place of supply for tour packages is typically the client's location (billing address state). For hotel bookings, it is the state where the hotel is located. For flight bookings, it is the state of departure. This means a single complex itinerary may involve multiple place of supply determinations — which is exactly why automated invoicing in a Travel CRM is so valuable.
8 GST invoicing mistakes Indian travel agencies make most often
Using the wrong SAC code
Using 9985 instead of the full 6-digit 998555 for tour packages, or using a generic service code instead of the travel-specific one. Wrong SAC codes can trigger notices during GST audits and prevent clients from correctly claiming ITC.
Charging 5% without stating the gross amount
When operating on the 5% no-ITC model, the invoice must explicitly state that the amount charged is the gross total including accommodation and transportation. Missing this statement can invalidate the invoice for the 5% rate.
Missing TCS on overseas packages
Many agencies issue a GST invoice but forget to add TCS for international packages. TCS is a separate obligation and must appear as a distinct line on the invoice.
Using trading name instead of registered GST name
If your GST registration is in the name 'Sunrise Travels Private Limited' but your invoice says 'Sunrise Holidays', this is a compliance issue. Always use the exact legal name as registered.
Wrong IGST vs CGST+SGST split
Charging IGST for an intrastate transaction or charging CGST+SGST for an interstate transaction is a common error that creates ITC problems for the recipient and filing mismatches for you.
Late invoice issuance
GST invoices must be issued within 30 days of service completion. Many travel agencies issue invoices only when the client asks — this creates serious compliance issues.
Not retaining supplier invoices for ITC
If you choose the 18% model to claim ITC on hotel and flight costs, you must retain valid GST invoices from your suppliers. ITC claims without supporting invoices are disallowed and recoverable with interest.
Treating all packages as the same
Domestic and international packages, commission-based and principal-based sales, and pure agent transactions all have different GST treatment. A one-size-fits-all invoice template will get at least some of these wrong.
How TripClap CRM automates your GST invoicing
The reason most of the mistakes above happen is that GST calculations are being done manually — by an agent who has ten other things on their mind, using an Excel template that was set up two years ago and may not reflect current rates.
TripClap CRM generates GST-compliant invoices automatically at the point of booking confirmation. Here is what that means in practice:
| Manual invoicing problem | What TripClap does instead |
|---|---|
| Correct GST rate calculated manually per booking | Rate is pre-configured per service type — agent selects package type and the system applies the correct rate automatically |
| SAC code looked up and entered for each invoice | SAC codes are embedded in service templates — 998555 for tour packages, 996411 for air tickets — applied without manual entry |
| CGST vs IGST determined by checking client state | Client GSTIN and billing state captured at lead stage; invoice automatically uses IGST or CGST+SGST split based on place of supply |
| TCS calculated and added manually for overseas packages | TCS flag set per destination — overseas packages auto-calculate 5% or 20% TCS based on declared prior bookings |
| Invoice sent manually via email after creation | Invoice auto-generated and delivered to client via email and WhatsApp on booking confirmation |
| Payment tracked in separate spreadsheet | Payment links (Razorpay/Cashfree) embedded in invoice — each instalment tracked and overdue reminders automated |
| GST report compiled manually for filing | Monthly GST summary report generated with one click — GSTIN-wise, rate-wise, state-wise breakdown ready for your CA |
The practical result: your agents spend zero time on GST calculations. Every invoice is correct the first time. Your CA has a clean monthly report rather than a box of receipts. And your clients receive professional, compliant invoices within minutes of confirming their booking — not 3 days later when someone remembered to send them.
Frequently asked questions
What is the GST rate for tour packages in India in 2026?
Effective September 22, 2025: domestic and international tour packages attract 5% GST without Input Tax Credit, or 18% GST with ITC — the tour operator chooses which model to adopt. Most small to mid-sized agencies opt for 5% for simplicity, but agencies with significant business overheads often find the 18% with-ITC model results in lower net GST liability. Consult a Chartered Accountant to determine which model is better for your specific cost structure.
Do travel agents charge GST on commission income?
Yes. Commission income earned by travel agents — whether from airlines for booking air tickets, from hotels for accommodation bookings, or from other service providers — is taxed at 18% GST. This applies regardless of whether you use the 5% or 18% model for tour packages. Service fees charged directly to clients are also taxed at 18% GST.
What is the SAC code for travel agencies in India?
The primary SAC code for tour operator and travel agency services is 998555 (Tourism and Travel-Related Services). Air ticket booking services use SAC 996411. Hotel booking services use SAC 996311. Car rental services use SAC 996601. Visa assistance services use SAC 998213. Always confirm the correct 6-digit code with your CA, as the applicable code can vary depending on the specific nature of the service provided.
What is TCS on overseas tour packages?
Tax Collected at Source (TCS) is a tax that travel operators must collect from clients when selling international tour packages. Since October 2023: 5% TCS applies to overseas package amounts up to ₹7 lakh per person per financial year, and 20% TCS applies to amounts exceeding that threshold. TCS is shown as a separate line item on the invoice, separate from GST. You must have a TAN (Tax Deduction and Collection Account Number) to collect and deposit TCS — this is a separate registration from your GST number.
When must a travel agency register for GST?
GST registration is mandatory for travel agents and tour operators whose annual turnover exceeds ₹20 lakh (₹10 lakh for businesses in special category states). Even if your turnover is below this threshold, you must register if you provide services across state lines (interstate supply) — which most travel agencies do when booking hotels or holidays in other states. If you are selling international packages with TCS obligations, you must also register for TAN separately.
How does a Travel CRM help with GST invoicing?
A Travel CRM like TripClap automates GST invoicing so your team never has to manually calculate rates or fill in SAC codes. The CRM is pre-configured with the correct GST rates for each service type — 5% or 18% for tour packages, 18% for commissions, automatic CGST/SGST or IGST split based on client state. Invoices are auto-generated at booking confirmation and sent directly to clients via email and WhatsApp with embedded Razorpay or Cashfree payment links. Monthly GST reports are generated with a single click, ready for your accountant.
Stop calculating GST manually — let your CRM handle it
Every invoice your team calculates by hand is a risk: wrong rate, wrong SAC code, missing TCS, wrong IGST/CGST split. Every manual error is a potential penalty, a client complaint, or an ITC claim rejection.
TripClap CRM generates GST-compliant invoices automatically — the right rate, the right SAC code, the right tax split — every time, from the moment a booking is confirmed. Your agent clicks confirm, the client gets a professional invoice, and your CA gets a clean monthly report.
Try TripClap free today — Free registration at tripclapcrm.com — no credit card required. GST invoicing pre-configured for Indian travel agencies. Call +91-8069186564 to see the invoicing workflow in a live demo.
Disclaimer: Consult your Chartered Accountant for guidance specific to your business model. GST rates and rules are subject to change.