GST for Air Travel Agents

In simple terms, air travel agent can be said to be a person who is engaged in providing any service which is connected with the booking of passage for travel by air. In this article, we look at the provisions of

GST for air travel agents in detail. Broadly, air travel agent derive following types of incomes:

Processing/service fee for booking of tickets for the customer;
Commission income from the airlines for booking of air tickets.

Value Of Supply Of Services

Rule 32 of the Central Goods and Service Tax Rules, 2017 deals with the value in case of certain supplies and as per rule 32 (3) of the said rules provides that the value of supply of service in case of air travel agent shall be deemed to be following:

5% of the basic fare in case of the domestic booking for travel by air; and
10% of the basic fare in case of an international booking for travel by air.

‘Basic fare’, as mentioned above, means that portion of air fare on which commission is paid by the air travel agent by the airline.

GST Rates for Air Travel Agent

Description of Income	Value on Which GST is Payable	Rate of GST
Processing/service fee for booking of tickets for the customer	Invoice value	18%
Commission income from the airlines for booking domestic air tickets	5% of basic fare	18%
Commission income from the airlines for booking international air tickets	10% of basic fare	18%

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Frequently Asked Questions

Common questions about GST Regulation for Air Travel Agents: Service and Income.

According to the article, the value of supply of service in case of air travel agents for domestic bookings is deemed to be 5% of the basic fare. The basic fare refers to the portion of the air fare on which the airline pays commission to the travel agent.

For international air travel bookings by agents, the value of supply of service is deemed to be 10% of the basic fare, as per the Central Goods and Service Tax Rules, 2017.

The GST rate applicable on the commission income received by air travel agents from airlines is 18%, both for domestic and international air travel bookings.

Yes, the article clearly states that the processing/service fee charged by air travel agents to customers for booking tickets is subject to GST at a rate of 18%.

The term 'basic fare' refers to the portion of the air fare on which the airline pays commission to the air travel agent for booking the tickets.

Yes, Rule 32(3) of the Central Goods and Service Tax Rules, 2017 specifically deals with the valuation of services provided by air travel agents for both domestic and international air travel bookings.

No, the GST rate is not the same for domestic and international air travel bookings by agents. The value of supply is deemed to be 5% of the basic fare for domestic bookings and 10% of the basic fare for international bookings, but the GST rate applicable on the commission income is 18% in both cases.

The GST treatment for air travel agents is unique in the sense that the value of supply of their services is specifically defined in the GST rules, based on a percentage of the basic fare, which is different from the general valuation rules applicable to other service providers.

No, the article clearly mentions that the processing/service fee charged by air travel agents to customers for booking tickets is also subject to GST at a rate of 18%.

The article does not provide information on input tax credit for air travel agents. However, like other businesses, air travel agents may be eligible to claim input tax credit on the GST paid on their expenses, subject to the relevant provisions of the GST law.