• Tour operator services

We are a Tour operator falling under 5% GST (No ITC ) bracket. Our Service is made up like
1. Hotel (Base Price +12/18/28%GST)

2. Vehicle (Base Price + 5%)

3. Miscellaneous services like River rafting, tour guide etc at specific rate

4. Selling Price (Exclusive of Tax)=(1+2+3)+Margin

5. Nett Payable by customer (Inclusive of GST)= S.N 4+5%of S.N. 4

My Question
1. Can we use 18% instead of 5% and avail the credit of all input services. If yes, please quote with GST clause. If No, why not.
2. Hotels that we use sometimes comes under 20lakh gst bracket and do not have GST number. We are liable to pay GST under RCM (reverse charge mechanism), if I consider the same post 31st march, 2018 on his behalf. What would be rate of GST in that case, @5% @Tour operator services GST rate or @12% Hotel service  GST rate.
3. After paying GST as RCM, can I claim refund of GST on subsequent month. As per my understanding answer is NO, since tour operator services falls under no ITC. But some operators are taking the credit considering, they are paying on behalf of different service, which also seems a valid reasoning.

CA's who can answer with GST clauses are welcome to answer. Only DISCUSSION and interpretations may please be avoided.

Asked 11 months ago in GST from Sonipat, Haryana
1) As you are falling under 5% GST without ITC, you cannot charge 18% and claim input credit. You can charge only what is chargeable under the ACT. U/s 2(82) of the CGST Act, "(82) “output tax” in relation to a taxable person, means the tax chargeable under this Act on taxable supply of goods or services or both made by him or by his agent but excludes tax payable by him on reverse charge basis;" When you are charging 18% on your output, the end customer is paying 18% GST instead of 5% as applicable, which is not permissible. 2) Under RCM, the rates of taxes are as applicable to the respective products / services. U/s 2 (98) of the CGST, “reverse charge” means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or subsection (4) of section 5 of the Integrated Goods and Services Tax Act; Thus under RCM, you are discharging the liability of the supplier of goods or services. Hence,the respective rates will apply. 3) This seems to be a grey area. The output tax specifically excludes tax paid under RCM, as output is defined to exclude RCM.The input credit is normally available in respect of RCM. However, as you are registered as a dealer without credit input tax, you will not be able to claim credit for RCM. Trust your queries are adequately addressed. It is advisable to follow conservative approach in dealing with GST, unless the stakes are very high and you will be in a position to afford appeals and the related uncertainties.
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