Invoicing method for tour operator services under GST, Goods and Services Tax - GST

[gururaj Bhat]

Dear Sir,

A registered dealer is engaged in tour operating services. For tour package services he charges 5% on whole amount. For individual services like air ticket, visa, passport services he raises a single tax invoice which includes reimbursement of cost & his handling charges. GST will be charged on handling charges only.

1. Is the above method right way of raising the invoices for reimbursement.

2. In GSTR-1 should we need to show the reimbursement value + taxable value + GST or should we need to show only taxable value + GST.

3. Reimbursement amount will be transferred to registered dealer account from the customer & the dealer transfers it to vendors. The vendor issues a invoice in the name of registered dealer with customer details or should we get the invoice in the name of customer itself.

Pls advice.

Thank you.

Posts / Replies

[Ganeshan Kalyani]

In my view, you can get the invoices in the name of customer, so that you can avail benefit of pure agent service. GST is not applicable in those expenses. The handling charges will continue to be taxable as it is your commission or fees.

[Amit Agrawal]

One needs to see every facets of the contractual arrangement between the registered dealer and his client before taking any call on liability (if any) to pay taxes against 'reimbursement of various cost elements'.

In this regards, following provisions are worth noting:

A. Definition of consideration as per Section 2(31)

B. Clause (b) & (c) of sub-section 2 of Section 15

C. Rule 33 (i.e. Value of supply of services in case of pure agent.)

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[gururaj Bhat]

Thanks sir, for your valuable advice.

[Shilpi Jain]

In case the reimbursement is pure agent reimbursement then there is no need to disclose the same in the returns.

[gururaj Bhat]

Thank you maam for your feedback.