Query:

Travel agent is charging 18% GST on service charges on air tickets. He has to show service charge on invoice and this creates lot of problems for him.

Few travel agencies are charging GST on basic fare of airlines and they are not showing their service charges in invoice, which is 0.9 % of the air basic fare.

Reply:

Value of supply of services in case of air travel agent:

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:

1.  5% of the basic fare in case of the domestic booking for travel by air; and

2. 10% of the basic fare in case of an international booking for travel by air.