Demystifying GST on Business Travel

Do your employees travel frequently on business? Are you saving money by claiming Input Tax Credit on their business travel? While most of us are aware of GST, we miss out on the savings that we can avail when paying taxes, in the form of ITC.

Let us learn more about this crucial component.

What is Input Tax Credit?

ITC is the mechanism, which allows you to claim the tax you paid on an input for your business, at the time of paying for tax on output/sales. Since business travel is considered an ‘input’ towards the business, companies can claim ITC on the same.
For example, you paid INR 400 as tax when travelling for business. This amount counts as your ‘input’ cost.

Thereafter, once your product/service is ready, suppose, you have to pay INR 500 as tax on sales. Here, you can claim input credit of INR 400 (paid during business travel) and only pay remaining INR 100 as tax.

GST on Flights & Hotels

For flights, irrespective of the location of the company, ITC can be availed on all bookings.
For hotels however, the company should have the GST registration in the same state as the hotel, in order to claim the benefits on CGST and SGST. In such cases, it helps to have a pan-India GST number, so the company can avail the ITC benefits while booking hotels anywhere in the country.

Tax Slabs on Flights & Trains

Economy class: 5 %
Business class: 12 %
Non AC train tickets: Tax free
AC train tickets: 5 %

Tax Slabs on Hotels

Upto INR 1000/night: Nil
From INR 1001 to INR 7500/night: 12%
Above 7500/night: 18%

Who Can You Claim the GST from?

You can claim the GST from both, your service provider, as well as the supplier:

Travel service provider: The ITC will be claimed on the convenience fee charged buy them.
Supplier: Here, the ITC will be claimed on the tax charged by the hotel/flight.

Steps to Claim Input Tax Credit

The process to follow for claiming ITC is:

Provide your correct details to the travel service provider + supplier. Any error in these details will result in loss of ITC.
Obtain GST invoice from your supplier (hotel/flight). ITC on flights can be availed for any destination. However, for hotels, the company needs to be registered in the same state as the booked hotel.

For e.g., if your company has a Delhi GTIN, and you have booked a hotel in Nagpur, you will not be able to claim ITC. To be able to do so, you need a Maharashtra/pan India GSTIN.

The travel service provider + supplier will upload the respective GST amount on the government website by the 20^th of subsequent month. This can be checked by the company on their portal.
This amount gets credited to the company as ITC.

Details Required on Your GST Invoice:

Registered Name of the Company
Registered Address of the Company
Company GSTIN
PAN Number

GST Benefits with myBiz

myBiz, the smart travel management platform by MakeMyTrip, offers 100% GST Invoice Assurance on your bookings.
GST and PAN details are saved on the portal and automatically uploaded on all your invoices.
myBiz also intelligently serves up the right state-wise GSTIN of your company when availing ITC for hotels; something that is impossible to implement at an individual level within companies.

Why switch to myBiz?

Because it is a smart corporate travel management platform offering a customizable, real-time self-booking system, which seamlessly integrates into a company’s structure to deliver convenience, transparency, savings, and the power of choice.

Switch to myBiz today and step into a world of Savings & Privileges!

Add savings & convenience to your corporate travel!