Deepak and the ₹86,400 GST misclassification from package bundling
Deepak, 37, runs Solang Valley Treks (Old Manali) — four-person boutique trek agency. He quoted a Delhi client ₹2 lakh for a 5-day Spiti trek at 5% GST. Included: hotel (from Old Manali registered hotel), transport (from Delhi logistics firm), guide, meals, permits. He invoiced at 5% treating it as composite tour operation. GST officer said the vendor components were separate supplies. Back-tax demand: ₹86,400.
🚨 The problem
True composite: agency owns/controls all components. Deepak coordinates independent vendors with their own GST registrations. That is split supply (18% on commission + vendor rates). The hotel and Delhi firm were separate registered entities. The 5% assumption was wrong.
🚀 How GabFORGE helped
Agent read the notice and Notification 11/2017:
🔍 Verified the distinction: Vendors with independent GST registrations = split supply, not composite.
💬 Translated the structure: Commission 18% on coordination + vendor components at their rates.
📞 Connected the reconciliation: File response showing corrected invoice structure. Officer reviewed and accepted revised position. Final demand: ₹42,000 instead of ₹86,400.
Deepak now clearly separates invoice: accommodation (vendor's rate), transport (vendor's rate), agency coordination fee (18%). Defensible. IGST triggered on Delhi vendor bookings added complexity, but the principle held.
🇮🇳 Why this matters
Thousands of small travel agencies, event planners, and logistics coordinators sit between vendor registration systems and GST classification. GST assumes ownership; reality is coordination. Reading Notification 11/2017 clarifies which is which.
Composite vs. coordinated. Read Notification 11/2017. Invoice accordingly.