Place of Supply for Tour Operator Services, Goods and Services Tax - GST

[gururaj Bhat]

Dear Sir,

"ABC" is registered tour operator in Bangalore. Mr. A is a traveler or service recipient residing in Bangalore. Mr. A is approaches "ABC" for a package tour to Rajasthan. "ABC" outsources this package to registered dealer in Rajasthan & receives IGST bill.

Query 1: The package includes transport, accommodation & sight seeing. Should "ABC" raise a invoice with CGST/SGST based on service recipient location or raise IGST as the the place of supply is in Rajasthan.
Query 2: The package includes accommodation & sight seeing only. Should "ABC" raise a invoice with CGST/SGST based on service recipient location or raise IGST as the the place of supply is in Rajasthan.

Later Mr. A residing in Bangalore decides to take package tour to Dubai should ABC raise a invoice with CGST/SGST or IGST.

Please advice to how to arrive place of supply whether it is based on traveler address or actual place of service performed.

Posts / Replies

[KASTURI SETHI]

Dear Querist,

Query No.1 : IGST is applicable. The registered dealer in Rajasthan is supplying the subject services for and on behalf of 'ABC'. It is inter-State supply. Hence the place of supply is Rajasthan. See Section 12 (3) of IGST Act

Query No.2--IGST Section 12 (6 & 7) of IGST Act. You are receiving services from registered dealer in Rajasthan who is working for and on behalf of 'ABC located in Bangalore. Inter-State supply. Hence IGST.

Query No.3 IGST. Service being supplied out of country. See Section 13 (3) of IGST Act.

[gururaj Bhat]

Dear Sir, Thank you for your reply.

Mr A residence address is in bangalore as per the documents.

Mr. A's tour package services will start from Bangalore by boarding flight from Bangalore to Rajasthan which is part of package. The package tour service starts from Bangalore

In case of Dubai foreign tour Mr. A tour package services includes air ticket, visa, insurance, stay, sight seeing etc. Mr. A takes visa, insurance, flight tickets from bangalore & boards flight to dubai from bangalore. The package tour service starts from Bangalore.

In the above two cases still we need levy IGST. Pls advice.

[DR.MARIAPPAN GOVINDARAJAN]

Dear Sethi Sir,

In this case who is to raise invoice to the beneficiary whether ABC or its agent?

[gururaj Bhat]

Dear Sir,

In addition to above query, the registered tour operator in Rajasthan raises IGST invoice to ABC tour operator mentioning SAC 998555. As ABC is into same line of business it claims the ITC.

Mr A pays to ABC the tour package charges on principal module ABC charges gst on whole value- 1,00,000 + 5% gst
ABC pays to airlines for ticket - 40,000
ABC pays to tour operator in Rajasthan - 50,000
ABC pays to travel insurance - 1,000

In the same way Mr A pays to overseas tour package to dubai on principal module ABC charges gst on whole value 2,00,000 + 5% gst + 5% TCS
ABC pays to airline for ticket - 80,000
ABC pays to Dubai tour operator - 80,000
ABC pays to Visa Consultant - 10,000
ABC pays to Travel Insurance - 2,000

Here Mr A pays to ABC & ABC pays sub vendors there is no link between Mr A & sub vendors.
In the above cases should we raise CGST/SGST invoice based on A location. Pls advice.

[KASTURI SETHI]

Dear Querist,

From all aspects IGST is applicable. .

(i) There are so many factors. First question before you is ;who is the actual service provider and who is the actual service receiver in the whole sequence. That is the basic criteria to arrive at correct place of supply. A person who makes payment (bears expenses) is the actual receiver of service. and a person who receives payment is the actual service provider.

(ii) Who makes payment to whom and who raises invoice to whom; both factors are very very important.

(iii) Above should be analyzed with Sections 10, 12 & 13 of IGST Act . 7

(iv) Registered dealer supposed as 'A' is also in this scenario.

"In addition to above query, the registered tour operator in Rajasthan raises IGST invoice to ABC tour operator mentioning SAC 998555. As ABC is into same line of business it claims the ITC.

Mr A pays to ABC the tour package charges on principal module ABC charges gst on whole value- 1,00,000 + 5% gst
ABC pays to airlines for ticket - 40,000
ABC pays to tour operator in Rajasthan - 50,000
ABC pays to travel insurance - 1,000

In the same way Mr A pays to overseas tour package to dubai on principal module ABC charges gst on whole value 2,00,000 + 5% gst + 5% TCS
ABC pays to airline for ticket - 80,000
ABC pays to Dubai tour operator - 80,000
ABC pays to Visa Consultant - 10,000
ABC pays to Travel Insurance - 2,000

Here Mr A pays to ABC & ABC pays sub vendors there is no link between Mr A & sub vendors.
In the above cases should we raise CGST/SGST invoice based on A location. Pls advice.".

998555 Tour operator services

This service code includes arranging, assembling, and marketing package tours pre-packaged tours, domestic and international; custom package tours for groups, domestic and international

Note : Such a package usually includes buying and reselling passenger and baggage transportation, accommodation, food and sightseeing services. The resulting package tours may be sold to individuals, travel agents or other tour operators.

[gururaj Bhat]

Dear Sir, thank you for your reply. For further clarification.

a. For Mr A (URD) in bangalore approaches “ABC” registered tour operator from bangalore & he is the service provider of tour package to Mr “A”. Package includes Air ticket, Land Package, insurance etc. Mr. A pays the complete package amount to “ABC” & ABC” the tour operator raises the invoice to Mr. A. Mr. A is the actual service receiver.

b. The rajasthan dealer provides a part of tour package service & raises a bill to ABC & ABC pays for to him for his services rendered.

c. ABC makes payment to Airlines, Rajasthan tour operator, insurance company etc.

d. All the bills will be received in the name of “ABC” tour operator.

e. The invoice raised to Mr A by ABC is of principal module not as a pure agent.

f. As the service recipient Mr A is in bangalore & service provider ABC is in bangalore. Can we raise CGST/SGST. Pls advice.

[KASTURI SETHI]

For further clarification.

1. For Mr A (URD) in Bangalore approaches “ABC” registered tour operator from Bangalore & he is the service provider of tour package to Mr “A”. Package includes Air ticket, Land Package, insurance etc. Mr. A pays the complete package amount to “ABC” & ABC” the tour operator raises the invoice to Mr. A. Mr. A is the actual service receiver. IGST Enjoyment of service outside State of Bangalore. See Section 13 (13) of IGST Act. It is not mere booking.
2. The Rajasthan dealer provides a part of tour package service & raises a bill to ABC & ABC pays for to him for his services rendered. IGST Applicable.
3. ABC makes payment to Airlines, Rajasthan tour operator, insurance company etc.
4. All the bills will be received in the name of “ABC” tour operator.
5. The invoice raised to Mr A by ABC is of principal module not as a pure agent.
6. As the service recipient Mr A is in Bangalore & service provider ABC is in Bangalore. Can we raise CGST/SGST. ? NO.As replied at serial no 1. above.

Disclaimer to all above replies : These are my personal views for education purposes only and not meant for any court proceedings.

[Amit Agrawal]

With the understanding that 'ABC' (a registered tour operator in Bangalore) is providing 'pre-packaged tour services' to Mr. A and Mr. A is an unregistered person from Bangalore, my views are as under:

A. For tour at Rajasthan, ABC should be raising tax-Invoice on A charging IGST (i.e. inter-state supply) by showing place of supply as 'Rajasthan'.

B. For Dubai Tour, ABC should be raising tax-Invoice on A charging CGST & SGST (i.e. intra-state supply) by showing place of supply as 'Karnataka'.

In this regard, kindly note Section 12(7) of the IGST Act, 2017. Section 13 of the IGST Act, 2017 does not come into play here as both service provider and service recipient are located in India.

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

[gururaj Bhat]

Thank you Kasturi sir & amit sir for your valuable feedback.