GST and TCS on Air Tickets for Travel Agents in India: A 2026 Guide
By Ishaani Reddy (Ishaani Reddy writes about the consumer-protection side of travel — DGCA passenger rights, OTA refund policies, hidden fees, dynamic-currency-conversion traps and the seven kinds of booking mistakes that quietly drain Indian travel budgets.) · Published · Last updated · 10 min read
The tax question that trips up every new agent: do you charge GST on the whole ticket, or just on what you earn? Here's how GST and TCS actually work for air-ticket sellers in India in 2026 — the 18% rate, the deemed-value shortcut, input tax credit, and the flat 2% TCS on overseas tours.
Quick answer
An air travel agent in India charges 18% GST on what they earn — the commission or service fee — not on the full ticket price. Most agents use the deemed-value method: GST is calculated on a notional 5% of the basic fare for domestic tickets and 10% for international tickets, then taxed at 18%. Separately, TCS on overseas tour packages is a flat 2% from 1 April 2026 (the old 5%/20% slabs are gone). Always confirm the current numbers with your CA and on gst.gov.in / CBIC, because rules change.
GST is on your earnings, not the fare
This is the single biggest confusion for new agents, so let's kill it first. When you sell a ₹6,000 Delhi–Mumbai ticket, you are not liable to pay 18% GST on ₹6,000. The airline has already charged GST on the airfare to the passenger (5% on economy, 12% on premium/business as a broad rule — verify the current slab). Your GST liability sits only on the slice you keep: your commission from the airline and any service fee you add for the customer.
Think of yourself as a service provider. The service you sell is "booking and managing a flight," and the value of that service is your margin — not the ticket. Charge 18% GST on the full fare and you've just made yourself uncompetitive and probably broken the rule. So the real question becomes: how do you put a number on "your earnings" for GST? You've got two clean methods.
Method 1: the deemed-value shortcut (Rule 32(3))
The trade's favourite shortcut comes from Rule 32(3) of the CGST Rules, 2017. Instead of tracking the exact commission on every PNR, the rule lets an air travel agent treat a fixed percentage of the basic fare as the value of their service:
- Domestic tickets: deemed value = 5% of basic fare
- International tickets: deemed value = 10% of basic fare
You then charge 18% GST on that deemed value. "Basic fare" here has a specific meaning — it's the part of the fare on which commission is normally paid by the airline, i.e. not the taxes, fuel surcharge and other YQ/YR-type components. So you strip those out, take 5% (or 10%) of what's left, and apply 18% on top.
A simple worked structure (figures illustrative — plug in your own):
| Step | Domestic | International |
|---|---|---|
| Basic fare (taxes excluded) | Basic fare | Basic fare |
| Deemed value | 5% of basic fare | 10% of basic fare |
| GST charged on deemed value | 18% | 18% |
Why agents love this: it's predictable, it's defensible, and it doesn't force you to disclose your actual airline commission on the customer-facing invoice. The catch is you commit to the method — you can't cherry-pick deemed value on some tickets and actual commission on others within the same period just to lower tax. Talk to your CA about electing and sticking to one approach.
Method 2: GST on actual commission + service fee
The alternative is to charge 18% GST on the actual amount you make — the real commission the airline pays you plus any service/handling fee you charge the passenger. If you add a ₹250 service fee on a booking, that fee attracts 18% GST and shows on your tax invoice as a clearly identified line.
This method makes sense when:
- Your actual commission or service fee is genuinely small, so the deemed value would overstate your tax.
- You're a pure-agent setup passing the airline's invoice straight through and only billing your own fee on top.
- You want your books to mirror exactly what hit your bank account.
Both methods are legitimate. The deemed-value route wins on simplicity and privacy of margins; the actual-commission route wins on precision. Run both on a typical month of your own bookings and see which leaves you better off — then let your CA lock it in. For the bigger picture on how the trade prices itself, see our piece on net fares vs published fares and how much travel agents actually earn in India.
Input Tax Credit: the part agents leave on the table
Here's where a registered agent quietly recovers money. Once you're charging 18% GST on your services, you can claim Input Tax Credit (ITC) on the GST you pay on legitimate business expenses — and net that against the GST you collect. The GST you actually deposit is the difference.
Things that commonly carry GST you may be able to claim:
- Your B2B portal / GDS / API subscription fees
- Office rent (where the landlord charges GST), internet and software
- Marketing, ads and design services
- Accounting and professional fees
To claim ITC cleanly you need three things working together: a valid tax invoice from the supplier, the supplier actually having filed it (so it shows in your GSTR-2B), and the expense being for your business. Missing any one and the credit can be denied. This is exactly why disorganised agents overpay — they collect GST, never reconcile their inputs, and hand the government more than they owe. A neat habit: every vendor you pay, ask for a GST invoice with your GSTIN on it.
Tax invoice and place of supply — the boring bits that matter
A compliant tax invoice is non-negotiable once you're registered. At minimum it should carry your name and GSTIN, an invoice number and date, the customer's details (and GSTIN if they're a business claiming credit), a clear description of the service, the SAC code, the taxable value, and the GST split as CGST+SGST or IGST. For air travel agent services the relevant SAC sits in the 9985x family — confirm the exact code with your CA.
The place of supply decides whether you charge CGST+SGST (same state) or IGST (different state), and it's a frequent slip:
- Customer registered under GST: place of supply is generally the customer's registered location.
- Customer unregistered (most leisure travellers): it's typically your location, the supplier's place.
Get this wrong and a corporate client can't claim their ITC, which turns into an awkward phone call. If you sell to companies, this matters even more — our note on issuing a flight ticket as a travel agent walks through the documentation flow end to end.
TCS on overseas tours: flat 2% from 1 April 2026
TCS — Tax Collected at Source — is a separate beast from GST, and it bites the moment you sell overseas tour packages, not bare international air tickets in every case. The big 2026 change: TCS on overseas tour packages is now a flat 2%, effective 1 April 2026, under the Budget 2026 amendments. The earlier threshold slabs (the lower rate up to a limit and the much steeper 20% above it) have been removed. One simple rate, no threshold cliff.
What this means in practice:
- You collect 2% TCS from the customer at the time of sale of an overseas tour package and deposit it against their PAN.
- It's not a cost to the traveller in the long run — it's adjustable against their income tax / refundable when they file. But it does affect the upfront amount you quote.
- The flat rate ends the working-capital squeeze that the old 20% slab created for higher-value packages and group tours.
Two cautions. First, the line between an "overseas tour package" (TCS applies) and a standalone international air ticket can be subtle and has historically been litigated — get your CA to classify your specific product. Second, TCS interacts with the Liberalised Remittance Scheme for other foreign remittances; the 2% number above is the tour-package figure. Verify the current position on the CBIC and income-tax portals, and read it alongside our deeper dive on tax for agents as rules evolve.
Do you even need to register? Thresholds in plain English
If you're just starting out, you may not need GST registration on day one. For service providers the broad rule is registration becomes mandatory once aggregate turnover crosses ₹20 lakh a year in most states, or ₹10 lakh in the listed special-category states. "Aggregate turnover" is computed across India on the same PAN, not state by state.
But three things often force registration earlier:
- You make inter-state taxable supplies.
- You want to claim ITC (you can't without registering).
- Your B2B partners and airline programmes ask for a GSTIN before they'll appoint you — which, realistically, most serious agents hit fast.
So even if you're under the threshold, many agents register voluntarily because the credit and credibility are worth it. If you're at the very beginning of this journey, start with how to become a travel agent in India and how to start a travel agency, then come back here once you're booking volume.
How FlightGPT Partner helps with the paperwork
Tax compliance gets painful when your bookings are scattered across five airline portals, each with its own statement, its own commission logic and its own invoice format. Reconciling that for GST is a monthly headache.
FlightGPT Partner is FlightGPT's B2B portal: one login that pulls series fares, group fares, fixed departures and wholesale/net fares across IndiGo, Air India, Akasa and SpiceJet into a single screen — with an agency wallet, GST invoicing and white-label options. Because every booking and invoice flows through one system, your taxable values and inputs sit in one place at month-end instead of in six different inboxes. That's one credible option among several — compare it honestly against others in our best B2B portal and TBO vs Riya vs EaseMyTrip rundowns. To see how prepaid balances feed your accounting, read how agency wallet and credit work. The portal helps you stay organised; it does not replace your CA.
Frequently asked questions
Do I charge 18% GST on the full air ticket price?
No. As an air travel agent you charge 18% GST only on your earnings — your commission and any service fee — not on the whole fare. The airline already charges GST on the airfare itself. You compute your taxable value either via the deemed-value method (5% of basic fare domestic, 10% international) or on actual commission plus service fee, and apply 18% to that. Confirm specifics with your CA.
What is the deemed-value method under Rule 32(3)?
It's a shortcut in the CGST Rules that lets you treat a fixed slice of the basic fare as the value of your service: 5% for domestic tickets and 10% for international. You then charge 18% GST on that notional amount. It saves you from tracking exact commission on every PNR and keeps your real margins off the customer invoice. You generally commit to one method, so check with your CA before electing it.
Can I claim Input Tax Credit as a travel agent?
Yes, if you're GST-registered and charging 18% on your services. You can claim ITC on GST paid for legitimate business costs — B2B portal subscriptions, office rent with GST, software, marketing, professional fees — provided you hold a valid tax invoice with your GSTIN and the supplier has filed it so it appears in your GSTR-2B. The GST you finally deposit is what you collected minus eligible input credit.
What is the TCS rate on overseas tour packages in 2026?
As of Budget 2026, TCS on overseas tour packages is a flat 2%, effective 1 April 2026, with no threshold slab — the earlier tiered structure (a lower rate up to a limit and a much higher rate above it) has been removed. You collect 2% from the customer at the point of sale and deposit it against their PAN; it's adjustable or refundable for them at income-tax filing. Verify the current position with CBIC and your CA.
Do I need GST registration to sell flight tickets?
Not always on day one. For service providers, registration is broadly mandatory once aggregate turnover crosses ₹20 lakh a year (₹10 lakh in listed special-category states). But you must register if you make inter-state supplies, want to claim ITC, or if your airline programmes and B2B partners require a GSTIN — which most serious agents need quickly. Many register voluntarily for the credit and credibility.
Is the GST or TCS treatment different for international versus domestic tickets?
Yes on both. For GST deemed value, domestic tickets use 5% of basic fare and international tickets use 10%, each taxed at 18%. TCS is a separate matter that applies to overseas tour packages (flat 2% from 1 April 2026), not necessarily to a standalone international air ticket — the classification of your product matters, so get your CA to confirm how your specific package is treated.