18% GST on travel agent commission — how to register, file GSTR-3B, and claim ITC in India (2026)
By Arjun Kapoor (Arjun Kapoor tracks error fares, mileage runs and award-chart sweet spots for Indian travellers. He moderates two Telegram fare-alert channels and has booked Europe round-trips at sub-₹25,000 four times in the last 24 months.) · Published · 11 min read
Travel agents in India are liable to pay 18% GST on the commission or service-fee income they earn — not on the full ticket value. Claiming Input Tax Credit (ITC) correctly on business expenses like GDS software subscriptions, office rent and internet can offset a meaningful chunk of that liability.
TL;DR — the quick answer
Indian travel agents pay 18% GST on their commission or service-fee income — not on the gross ticket value. You register under GST once annual turnover exceeds ₹20 lakh (₹10 lakh for special-category states). You file GSTR-3B monthly (or quarterly under QRMP), declare your output tax, and then subtract ITC on eligible business purchases — GDS subscriptions, accounting software, office rent (with GST invoice), internet, and so on. The most common mistakes that draw scrutiny: claiming ITC on airline ticket GST (you can't, because the airline directly pays tax on the passenger fare), misclassifying gross ticket value as turnover, and missing the reversal required when a ticket is cancelled and commission is refunded.
What exactly is taxable — commission or the full ticket value?
This is where a lot of agents get confused, and getting it wrong inflates your liability several times over. The GST treatment depends on how you operate:
- Pure agent model (most common): You book tickets as a pure agent on behalf of the traveller. The airline or tour operator is the principal. Your taxable supply is only the commission or service fee you retain. If you book a ₹15,000 ticket and retain ₹800 as commission, you pay 18% GST on ₹800 — that's ₹144, not ₹2,700.
- Principal model: Some consolidators buy bulk inventory at net fares and resell at a markup. Here, GST applies to the margin under the Tour Operator SAC code (998551 or 998552), or on gross value if you are acting as a tour operator providing a comprehensive package. If this is you, get a CA involved — the calculation is different and CBIC has issued several clarificatory circulars.
- International air tickets: These are zero-rated under GST — the airline charges no GST on the international ticket. But your service fee for booking an international flight is still taxable at 18% under SAC 998551 (air transport booking services).
The CBIC circular 163/19/2021-GST and the subsequent FAQ on travel agents are worth bookmarking — though always verify the current version on cbic.gov.in since clarifications get updated.
GST registration: who needs it and how to do it
If your aggregate annual turnover from commission and service fees exceeds ₹20 lakh (₹10 lakh in Mizoram, Manipur, Nagaland, Tripura, and a few other special-category states), GST registration is mandatory. Even below this threshold, voluntary registration can make sense — it lets you issue GST invoices to corporate clients who need ITC, and lets you claim ITC on your own purchases.
To register, go to gst.gov.in, apply under REG-01, and select SAC 998551 (services auxiliary to air or rail transport — i.e., booking/reservation services) as your primary service. You will need your PAN, Aadhaar, a cancelled cheque and proof of your business address. If you operate under a trade name different from your own name, you will also need your shop/establishment registration. The process is mostly online and typically takes 3–7 working days for approval.
Once registered, you are assigned a GSTIN — a 15-digit number your clients need to claim ITC. Put it on every invoice you raise. If you are listing on B2B portals like FlightGPT Partner, make sure your GSTIN is updated in your profile so corporate bookings reflect correctly in your clients' GSTR-2A.
Filing GSTR-3B on commission income — a practical walkthrough
GSTR-3B is the monthly or quarterly summary return where you declare your output tax liability and claim ITC. For a travel agent, the flow looks like this:
- Compute your output liability: Total commission and service fees collected in the month × 18%. For example, if you earned ₹80,000 in fees, your output GST is ₹14,400.
- Populate Table 3.1(a): Enter outward taxable supplies (your commission/fee total) and the integrated, central, and state tax breakdown based on the nature of your clients (inter-state vs intra-state).
- Compute eligible ITC in Table 4: Add up GST paid on your business purchases — GDS/CRS software subscription, office rent (only if your landlord is GST-registered and you have an invoice), internet, business travel expenses. Pull the figures from your GSTR-2B (auto-populated from your suppliers' returns) — don't claim what is not in 2B, as it will flag a mismatch.
- Net off and pay: Output GST minus eligible ITC = amount due. Pay via your Electronic Cash Ledger using NEFT/UPI. File by the 20th of the following month (for monthly filers).
One hard rule: ITC on motor vehicles used for personal travel of the proprietor is blocked under Section 17(5) of the CGST Act. If you claim ITC on your personal car's service, expect it to be reversed in scrutiny.
What ITC can a travel agent actually claim?
This is where agents either leave money on the table or overclaim and invite notices. Here is a realistic list:
| Eligible (subject to supplier filing) | Blocked or restricted |
|---|---|
| GDS/CRS software (Amadeus, Galileo, Sabre) subscription | GST on air tickets booked for clients (airline pays the base tax) |
| Office rent (GST-registered landlord, valid invoice) | Personal motor vehicle fuel and servicing |
| Internet and broadband | Food and beverages (unless core business of a caterer) |
| Accounting/invoicing software (Zoho Books, Tally subscription) | Club memberships and health club fees |
| Business phone and SIM (proportionate use) | Works contracts for immovable property (own office construction) |
| Digital marketing services (SEO, Meta ads) for agency | ITC on cancelled bookings where commission is reversed |
The most common audit flag I see discussed in travel-agent GST forums: claiming ITC on airline GST invoices. When IndiGo or Air India issues a GST invoice to the passenger, the airline is the supplier and the passenger is the recipient — you, the agent, are not in that supply chain. You have no ITC entitlement on it.
Common mistakes that trigger GST notices for travel agents
A few patterns come up repeatedly when agents share horror stories about demand notices:
- Treating gross ticket value as turnover: This inflates your apparent turnover and can push you into higher-scrutiny categories or cause TDS mismatches. Your turnover for GST is your commission and service fees, not the ticket cost you collect and pass on to the airline.
- Not reversing ITC on cancellations: If a booking is cancelled and you refund or reverse the commission, any ITC you claimed on that transaction must be reversed in the same period or the next. Many agents forget this.
- GSTR-1 vs GSTR-3B mismatch: If your GSTR-1 (outward supply details) does not match GSTR-3B, the system flags it automatically. File GSTR-1 first, then reconcile before filing 3B.
- Claiming ITC before the supplier files: You can only claim ITC on invoices that appear in your GSTR-2B. If a vendor has not filed, the ITC will not show — do not manually add it and hope for the best.
- Incorrect HSN/SAC code on invoices: Use SAC 998551 for air transport intermediary services. Using a generic SAC like 999999 will cause mismatches in e-invoicing and B2B ITC reconciliation for your corporate clients.
If you get a notice under ASMT-10 (scrutiny of return), respond within the time given (typically 30 days) with a CA-certified explanation and supporting documents. Ignoring notices escalates to demand orders with interest at 18% per annum and penalty.
When should a travel agent get a CA — and what to ask for?
If your annual commission income is under roughly ₹25–30 lakh and you operate a simple pure-agent model with no packaged tour sales, a good GST practitioner (not necessarily a full CA) can handle your filings at a reasonable monthly retainer. Beyond that, or if you are selling tour packages where the GST treatment is more complex, a CA experienced in travel-industry GST is worth the fee.
Things to specifically ask your CA or GST practitioner: (a) Can they reconcile your GSTR-2B each month before you file 3B? (b) Have they issued an ITC eligibility note for your specific business model? (c) Are they set up to handle e-invoicing if your B2B turnover exceeds the relevant threshold? As of 2026, e-invoicing is mandatory for taxpayers above ₹5 crore aggregate turnover — if your agency is growing, plan for this.
You can also use platforms like FlightGPT Partner to keep a clean record of your bookings and commissions earned — this makes your monthly reconciliation considerably less painful. For more on agent-side operations, see our pieces on Amadeus PNR mistakes and ADMs and serving NRI clients from India.
Frequently asked questions
Is GST charged on the full air ticket price or just the agent's commission?
For agents acting as pure intermediaries, GST at 18% applies only to the commission or service fee retained — not the gross ticket value. So if you earn ₹800 on a ₹15,000 booking, your GST output is around ₹144. Tour operators selling packaged holidays are taxed differently — verify with a CA on the applicable SAC code.
Can I claim ITC on the GST charged on domestic air tickets I book for clients?
No. The GST on domestic air tickets is between the airline and the passenger — you are not the recipient of that supply. Your ITC is limited to the GST you pay on your own business expenses: GDS subscriptions, internet, office rent (where the landlord is GST-registered), software, and similar costs.
What SAC code should a travel agent use for GST invoices?
SAC 998551 covers 'services auxiliary to air transport' — which is the standard code for flight booking and reservation services. For hotel booking services, SAC 998552 is typically used. Using the correct code matters for your clients' ITC reconciliation and avoids e-invoicing mismatches.
When is GSTR-3B due for a travel agent in India?
For monthly filers, GSTR-3B is due by the 20th of the following month. Under the QRMP scheme (for taxpayers with turnover up to ₹5 crore), you file quarterly but pay tax monthly via the PMT-06 challan. Check the current GST calendar on gst.gov.in, as due dates occasionally shift.
What happens if I miss filing GSTR-3B on time?
Late fees currently apply at around ₹50 per day (₹25 CGST + ₹25 SGST) for taxpayers with tax liability, and ₹20 per day if there is nil liability. Interest at 18% per annum accrues on the unpaid tax amount from the due date. Repeated non-filing can lead to cancellation of your GSTIN.
Does GST apply to international flight booking commission earned by Indian agents?
Yes. Even though the international air ticket itself is zero-rated (no GST on the fare), the service fee or commission you charge for booking it is a taxable service at 18% in India. The place of supply is India (your business location), so domestic GST applies to your service fee regardless of where the flight goes.