GST: Guide For Travel Industry (PDF, 327KB)
You may be selling travel products, or you may be providing travel arranging services. The GST treatment depends on what you supply and who your customers are.
On this page:
GST treatment for travel products
| Type of travel products | GST treatment |
|---|---|
International transport of passengers
(E.g. sale of air tickets, ferry tickets, coach tickets to other countries) | Zero-rate under section 21(3)(a) of the GST Act. |
Travel insurance for international transport of passengers | Zero-rate under section 21(3)(c) of the GST Act. |
Travel accommodation
| Depends on location of the property:
|
Outbound tour packages (E.g. tours to other countries) | Zero-rate under section 21(3)(i) of the GST Act. |
Inbound tour packages (E.g. tours in Singapore) | Standard-rate. |
GST treatment for travel arranging services
Travel arranging services are services to book or facilitate payment for travel products like flights, accommodation, or tour packages. You can provide these services online, by phone or in person. From 1 January 2023, zero-rating depends on who you contract with and who directly benefits from the services.
Services supplied on or after 1 January 2023
| Type of travel arranging service | Local customer | Overseas customer |
|---|---|---|
Arranging international transport of passengers and related insurance:
(E.g. services to arrange air tickets and travel insurance bookings) | Standard-rate
| Zero-rate under section 21(3)(j) of the GST Act if the service directly benefits an overseas person or a GST-registered person in Singapore. Otherwise, to standard-rate. |
Arranging travel accommodation (E.g. services to arrange hotel bookings) | Standard-rate
| Zero-rate under section 21(3)(j) of the GST Act if the service directly benefits an overseas person or a GST-registered person in Singapore. Otherwise, to standard-rate. |
Arranging tour packages (E.g. services to arrange tour package bookings) | Standard-rate | Zero-rate under section 21(3)(j) of the GST Act if the service directly benefits an overseas person or a GST-registered person in Singapore. Otherwise, to standard-rate. |
Type of travel arranging service | GST Treatment |
Arranging international transport of passengers and related insurance:
| Zero-rate under section 21(3)(c) of the GST Act. |
Arranging travel accommodation | Depends on location of the property:
|
Arranging tour packages | Standard-rate if supplied to a local customer. Zero-rate under section 21(3)(j) of the GST Act if the service is supplied to an overseas person and directly benefits an overseas person or a GST-registered person in Singapore. Otherwise, to standard-rate. |
GST on cancellation fees
You may charge cancellation fees as compensation for losses when customers cancel their bookings for travel products or as a deterrent. You do not need to charge GST on the cancellation fees if no additional goods or services are provided.
However, you must charge GST if you impose fees for the administrative services provided to help customers to cancel their bookings. Such administrative services provided to an overseas person may qualify for zero-rating under section 21(3)(j) of the GST Act if all the qualifying conditions are met.
Common scenarios
A local traveller engages you to arrange the booking of a tour package in Germany. You charge a service fee of $300 to the traveller.
As you are merely arranging the booking of the tour package on behalf of the local traveller and not supplying the tour package itself, you are providing travel arranging services. As your services are supplied to a local traveller, you must charge GST on your service fee.
An overseas tour operator engages you to promote and arrange bookings for its Germany tour packages. You secure a booking and receive a commission of $500 from the overseas tour operator.
Your commission of $500 is your fee for arranging the booking of the tour package for the overseas tour operator. As your travel arranging services are supplied to and directly benefit the overseas tour operator who belongs outside Singapore, you can zero-rate your commission income.
You supply a $1,000 regional tour package made up of $300 for a tour in Singapore and $700 for tours in Malaysia and Thailand.
You should charge GST only on the portion of the tour package covering Singapore. This is as the travellers are physically present in Singapore and thus consumes this portion of the tour locally. The portion of the tour package that is consumed overseas (i.e. Malaysia and Thailand) may be zero-rated.
Where the deposit is part payment for an inbound tour package, you must charge and account for GST on the deposit. You are to do so in the accounting period when the deposit is received. Where the deposit is part payment for an outbound tour package, the deposit may be zero-rated.