# Tour Operator Services to Foreign Tourists - Partial Exemption

## Concept

Services provided by a tour operator to a foreign tourist in relation to a tour conducted wholly or partly outside India → PARTIAL EXEMPTION

## Computation Formula

Value of supply exempted is the LOWER of:

(a) Consideration × (No. of days of tour outside India / Total days of tour)

(b) 50% of total consideration charged for the entire tour

## Definition of Foreign Tourist

A non-resident person who enters India for a stay of not more than 6 months for legitimate non-immigrant purposes.

## Step-by-Step Application

1. Identify total consideration for the tour

2. Count total days of the tour (start to end)

3. Count days actually spent outside India

4. Compute proportionate value: (Outside days / Total days) × Consideration

5. Compute 50% of consideration

6. Exempt value = LOWER of step 4 and step 5

7. Taxable value = Consideration − Exempt value

Worked example

### Example 1

Example 1: A tour operator charges ₹1,00,000 to a foreign tourist for a 10-day tour, of which 7 days are outside India.

Solution:

Proportionate exemption = (7/10) × ₹1,00,000 = ₹70,000
50% cap = 50% × ₹1,00,000 = ₹50,000
Lower of the two = ₹50,000 (EXEMPT)
Taxable value = ₹1,00,000 − ₹50,000 = ₹50,000

### Example 2

Example 2: Tour operator charges ₹2,00,000 for a 20-day tour, of which 8 days are outside India.

Solution:

Proportionate exemption = (8/20) × ₹2,00,000 = ₹80,000
50% cap = ₹1,00,000
Lower = ₹80,000 (EXEMPT)
Taxable value = ₹1,20,000

⚠️ Common exam mistakes

Applying only the proportionate formula without applying the 50% cap.
Granting full exemption if entire tour is outside India - the 50% cap still applies.
Treating Indian residents going abroad as eligible - exemption only for FOREIGN tourists.
Counting transit days incorrectly - days outside India should reflect actual presence outside Indian territory.

Bare-Act text Entry 54 · Notification No. 12/2017-Central Tax (Rate) · click to expand

Services provided by a tour operator to a foreign tourist in relation to a tour conducted wholly outside India. Value of supply exempt: amount charged for such tour less the amount charged for the part of the tour which takes place in India, subject to maximum of 50% of total consideration.

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GST Exemptions - Tour Operator Services to Foreign Tourists

Worked example

⚠️ Common exam mistakes