Two different levies — don't conflate them
GST is an indirect tax on your service, charged on the invoice. TCS (Tax Collected at Source, under Section 206C(1G) of the Income-tax Act) is something different: it's an income-tax amount you collect from the buyer and deposit against their PAN. It isn't your cost, and it isn't the client's final tax — it's a credit they claim when they file their return. Agents who describe TCS as 'extra tax lost' are explaining it wrong, and it costs them bookings.
GST on tour-operator services
The long-standing position is 5% GST without input tax credit (ITC) on tour-operator services, with a specific exception: GST charged to you by another tour operator in the same line of business can be taken as ITC and set off. Place of supply for services is generally where they're performed, and there are special cases — for example, a tour conducted wholly outside India for a foreign tourist is treated differently.
The 5%-without-ITC versus 18%-with-ITC choice has real margin consequences depending on how much input GST you actually incur — model it for your own cost structure rather than defaulting to one.
TCS on overseas tour packages
Under Section 206C(1G), the seller of an overseas tour package collects TCS from the buyer. The critical thing to know is that this rate has been revised almost every year: it has run at 5% up to a threshold and 20% above in recent cycles, and as of the 2026 Budget it was reported to move to a flat 2% on overseas tour packages with no threshold. Because it changes so often, the exact number is the one figure you must re-verify every season — do not quote from memory or from last year's circular.
How to present TCS to the client
Collected on top of the package price, deposited against the client's PAN, and claimable as a credit in their income-tax return — not a sunk cost. Spell this out on the quote so it doesn't read as a surprise markup. A client who understands TCS is a credit rarely objects to it; one who thinks it's your fee often walks.
Keep the invoice clean
Show GST and TCS as separate, correctly labelled lines, with the right SAC code on the service. Merging or mislabelling them causes reconciliation pain at your end and confusion at the client's — and makes an otherwise simple quote look opaque.