Question

We are operating a business of Travel agent. My client has booked a package for worth Rs. 200000 on which we will earn a commission of Rs. 10000. We have received a Advance of Rs. 150000 from the client against the package which is payable to the hotel. Kindly let me know on what amount I have to pay GST against the advance received as the same is not my income. Also let me know the rate of gst as well.

Answer

There may be two cases:

When you are supplying service as Pure Agent

As per Rule 33 if all the conditions of Pure agent are fulfilled then amount received as Pure agent will not be included in assessable value and hence no GST will be payable on advance received but commission will be taxable under head 9961 @ 18%. The conditions of Pure Agent are reproduced below:

(i) the supplier acts as a pure agent of the recipient of the supply, when he makes the payment to the third party on authorisation by such recipient;
(ii) the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and
(iii) the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account.

When you are supplying service as Travel Agent

As per Notification No. 11/2017 Central Tax (Rate) s.no. 23 the amount received as travel agent is taxable @ 5% (2.5% + 2.5%). The same is reproduced below:
 

23. Heading 9985 (Support services)

 

 

(i) Supply of tour operators services.
Explanation.- "tour operator" means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours.

2.5

 

1. Provided that credit of input tax charged on goods and services used in supplying the service other than the input tax
credit of input service in the same line of business (i.e. tour operator service procured from another tour operator) has not been taken
[Please refer to Explanation no. (iv)]

2. The bill issued for supply of this service indicates that it is inclusive of charges of accommodation and transportation required for such a tour and the amount charged in the bill is the gross amount charged for such a tour including the charges of accommodation and transportation required for such a tour.

(Reply dt. 16.06.2018)