Can you charge GST on flight tickets? Air-agent rules

A client asks why your invoice shows GST when the airline itself didn't charge any tax on the fare shown to them. Or a corporate client's accounts team wants to know if they can claim input tax credit on what you billed. Either way, the confusion is the same: agents and clients both assume GST on flight tickets means GST on the ticket price. It doesn't.

As a travel agent, GST applies to what you earn for booking the ticket, your commission or service fee, not to the airfare itself. The airfare is the airline's revenue and the airline's tax problem. Your GST liability sits entirely on your margin. This is true whether you're IATA-accredited or selling flights without IATA through a consolidator or B2B portal; the GST treatment on your fee doesn't change.

This post walks through the 18% rate, the Rule 32(3) alternative valuation most agents don't know they can use, how to invoice domestic and international tickets, what happens on cancellations and reissues, and when your client can actually claim ITC on what you charged them.

What GST actually applies to on a flight ticket

GST is charged at 18% on your commission and any service or handling charges you add, never on the base airfare or the airline's own taxes. As of July 2026, this is the standard rule under the CGST framework, and it's confirmed across CA guidance on GST for tours and travels. If you charge a flat ₹300 service fee per domestic ticket, GST is 18% of ₹300, which is ₹54. It is not 18% of the ₹5,000 airfare.

The airfare shown to the client already carries its own tax component collected and remitted by the airline, shown as a distinct tax line on the PNR. Your invoice and your GST return are only about your fee.

Careful: Never write "GST on airfare" on your invoice. It invites the client to ask why you're taxing money that never belonged to you, and it's the wrong description for what's actually happening. Label it as GST on service charges or commission.

Rule 32(3): the alternative valuation most agents skip

Rule 32(3) of the CGST Rules lets an air travel agent value their service at a deemed 5% of the basic fare for domestic bookings and 10% of the basic fare for international bookings, and charge 18% GST on that deemed value instead of on the actual commission earned. This is confirmed in guidance on Rule 32(3) for air travel agents, as of July 2026.

"Basic fare" here means the fare before the airline's own taxes and surcharges, the base fare number on the ticket, not the all-in price the client pays. The option exists because many agents earn commission baked into a net fare rather than shown as a separate line, which makes the actual amount hard to isolate for GST purposes. Rule 32(3) gives a simpler, defensible number to work from instead.

You don't have to use Rule 32(3). If your actual, documented commission or fee is lower than the deemed value, charging GST on the actual amount is usually cheaper for the client and just as valid. Confirm with your CA which route suits your booking pattern, since switching between the two isn't something you want to do invoice by invoice without a documented policy.

Booking type	Deemed value (Rule 32(3))	GST rate on deemed value
Domestic ticket	5% of basic fare	18%
International ticket	10% of basic fare	18%

Example: A domestic ticket has a basic fare of ₹5,000. Under Rule 32(3), the deemed value is 5% of ₹5,000 = ₹250. GST at 18% on ₹250 = ₹45. That ₹45 is what you charge and remit, regardless of whether your actual commission from the airline was ₹200 or ₹400.

Compare that with the actual-fee route: if you charge the client a visible ₹300 service fee on the same ticket, GST at 18% on ₹300 = ₹54. In this case, Rule 32(3) works out cheaper for the client by ₹9.

Now take an international ticket with a basic fare of ₹45,000. Under Rule 32(3), the deemed value is 10% of ₹45,000 = ₹4,500. GST at 18% on ₹4,500 = ₹810. If instead you charge a documented ₹500 service fee, GST at 18% on ₹500 = ₹90, far lower than the presumptive route. On international tickets especially, check which method actually costs your client less before defaulting to Rule 32(3).

Airline-issued vs agent-issued invoices: who charges what

The airline's invoice (or e-ticket) covers the fare and the airline's own taxes and surcharges; your agency invoice covers only your commission, service fee, or handling charge, and that's the only line where you charge GST. These are two separate tax events handled by two separate parties, and mixing them on one document confuses both your client and your GST filing.

If you're booking through a GDS, consolidator, or a B2B travel portal, the airline or portal issues the fare-side document for the base fare and airline taxes. You separately raise your own tax invoice for your fee, showing your GSTIN, the SAC code, and the GST amount computed by whichever method you've chosen. Match your paperwork to a standard GST invoice format for travel agencies rather than improvising one per client.

Careful: Don't let a client's accounts team merge your service-fee invoice with the airline's fare invoice into one number for their books. The GST components are different, taxed differently, and if the client is trying to claim ITC, they need your invoice to stand on its own with its own GST breakup.

GST on cancellation and reissue service fees

If you charge a separate fee for handling a cancellation, date change, or reissue, that fee is a service you're providing and it carries GST at 18% just like your original booking fee. The airline's own cancellation or reissue penalty (deducted from the refund) is the airline's charge and isn't yours to tax.

Say a client asks you to reissue a ticket after a date change. The airline charges a ₹2,500 reissue penalty, and you charge the client an additional ₹200 for handling the reissue (chasing the airline, reissuing the PNR, confirming seats). GST at 18% applies only to your ₹200, which is ₹36. The ₹2,500 airline penalty passes through untouched, since that was never your revenue.

When your client's company can claim ITC

A client's company can claim input tax credit on the GST you charged, provided you issue a proper GST tax invoice showing your GSTIN, invoice number, a clear description of the service, and the GST amount separately, and the travel is for a business purpose the client can substantiate. ITC applies to the GST on your fee, since that's the only GST component your invoice actually contains.

A handwritten receipt or a WhatsApp screenshot of the fare doesn't help their accounts team. If a client's GST practitioner rejects your invoice for ITC, it's almost always a missing GSTIN or a fare and fee bundled into one unclear line, not a genuine dispute about the rate.

Rule 32(3) is a valuation mechanism for the GST you charge; it's a separate provision from the tour-operator composition option, which has its own, unrelated 5%-without-ITC versus 18%-with-ITC choice. If your agency is weighing that separate decision, work through the 5%-without-ITC versus 18%-with-ITC arithmetic once with your CA.

Common questions

Can I charge GST on the ticket price?

No. GST applies only to your commission, service fee, or handling charge, never to the airfare itself. The airfare and the airline's own taxes are the airline's business, not yours, and putting GST on the fare line on your invoice is simply incorrect.

What about GST on the convenience fee?

Yes, a convenience fee is exactly the kind of service charge that attracts 18% GST, the same as a booking fee or handling fee. Whatever you call the charge (convenience fee, service fee, handling charge), if it's money you're keeping for your own service, it's taxed at 18%.

What GST rate applies to air ticket commission?

18%, applied either to your actual commission or service fee, or to the deemed value under Rule 32(3) (5% of basic fare domestic, 10% international), whichever method you've adopted and documented. As of July 2026, 18% is the applicable rate; confirm current rates with your CA since GST rate schedules do get revised.

If the airline already charged GST on the fare, do I charge it again?

No, and you're not charging the same tax twice even if it looks that way. The airline's GST on the base fare is the airline's own tax on its own revenue, shown separately on the ticket. Your GST is a completely separate charge on your own fee, and the two never overlap on the same rupee.

Which SAC code do I use for air ticketing?

Air ticketing and related agency services fall under specific Services Accounting Codes that your invoice should reference alongside the GST amount. Rather than guessing a code from memory, match it against the travel agency GST invoice format and SAC code reference so the code on your invoice lines up with what GST officers expect to see for this service category.

The short version

• GST at 18% applies to your commission, service fee, or handling charge on a flight ticket, never to the airfare or the airline's own taxes.
• Rule 32(3) lets you value your service at a deemed 5% of basic fare (domestic) or 10% (international) and charge 18% GST on that instead of your actual fee; compare both before picking one.
• Keep the airline's fare document and your own service-fee invoice separate; never merge them into one number for a client's books.
• Cancellation and reissue handling fees you charge carry 18% GST too; the airline's own penalty passing through to the client does not.
• Clients can claim ITC on the GST shown on your invoice if it's a proper tax invoice with your GSTIN and a clear fee breakup, for business travel they can substantiate.
• Use the correct SAC code and a clean invoice format so GST officers and client accounts teams don't have to ask twice.
• Rates and rules move; confirm current figures with your CA before you lock a valuation method into your billing template.