A Guide to Becoming A Licensed Travel Agent in India

Author : Aditya Sharma | Published On : 07 May 2024

The travel and tourism industry in India is one of the leading contributors to the economy. It also creates jobs. By 2020, there were more than 10,500 companies in the travel startup sector. This exponential development manifests the industry's prospects. Experts forecast that the travel industry will contribute $11,512.9 billion to India's GDP by 2027. For the next 10–20 years, the future looks promising.

Who is a Travel Agent?

According to laws, a Licensed Travel Agent is an individual that:

Offers you services for tickets (rail, road, air, or waterways) booking.
Book accommodation for you irrespective of a guest house, a hostel or an international hotel.
Designs specific tour and entertainment packages.
Provides any tourism-related services.

TourTravelWorld is the leading tour & travel portal in India. You can generate income for your tour & travel agency and get travel leads with TourTravelWorld. Their experience will assist you in setting up a successful as well as legitimate travel agency.

Governmental Recognition for Travel Agents

So how to become a travel agent in India? For that, you need to receive a stamp of approval from the Additional Director-General of the Ministry of Tourism. This recognition is valid for five years. Before granting recognition, the steps followed are:

An inspection and preliminary report is carefully submitted.
The report is meticulously checked by the concerned Regional Director and a five-member TAAI team.

Renewal of Governmental Recognition

You can renew or extend the recognition after five years by submitting a request for it. The renewal process involves:

Examination process of supporting documents by the Regional Director and one TAAI member.
Reviewing submitted documents by the Travel Trade Division.

The whole process takes about sixty working days. Also, the Ministry of Tourism has the right to terminate a license in cases of necessity by issuing a Show Cause Notice.

Travel Agency Business Entity Options

It is very important to choose the right business entity for your travel agency. It establishes the legal and financial implications. Common options include:

Sole Proprietorship: No legal separation, but simple organization.
Partnership: Shared responsibility among partners.
Limited Liability Partnership (LLP): Unites limited liability with a partnership system.
Private Limited Company: Separate legal identity with limited liability.

Considerations when choosing a business structure are ownership, liability and scalability.

GST Registration for Travel Businesses

GST registration is compulsory for travel businesses in India. To register as a travel agent or agency, the process involves:

Visiting the GST portal.
Providing essential details.
Completing the verification process.

GST registration assists with tax compliance and lets travel agencies deal with input tax credits. Adherence to the GST rules is a must to avoid the onset of penalties.

GST Payable by Air Travel Agents

Air travel agents pay Goods and Services Tax (GST) on services they provide. The applicable GST rate varies based on:

The nature of travel services.
The class of accommodation.

Knowing and being in line with GST liabilities are critical elements that make the air travel agency run smoothly. Their travel agent login ID with air or rail makes them earn commissions.

Trademark for Travel Businesses

Owning a trademark is imperative for a travel business to be successful. It safeguards brand identity and provides market positioning. The process involves:

Conducting a comprehensive trademark search to ensure uniqueness.
Applying with the right trademark authorities.

Trademark registration as a travel agent gives legal backing against unapproved brand use. This is the hall of fame for successful trademark registration. It protects the business from possible lawsuits.

Conditions for Getting Travel Agency Recognition

To get travel agent recognition, you have to meet the following conditions:

Provide a copy of the form with the necessary papers.
Having at least Rs. 3.00 lakh.
Include a certificate from a Chartered Accountant regarding capital investment and audited balance sheets.
Obtain approval from the International Air Transport Association (IATA). Or be a General or Passenger Sales Agent for an IATA-approved company.
Must have been in business for at least a year by the time of application.
Maintain a neat, clean and well-maintained office in India with a minimum floor area of 100 square feet.

Employee Requirements for Travel Agents

To meet employee requirements, a travel agency must:

Appoint a full-time, well-experienced and qualified owner or manager.
Specify developing highly effective and efficient communication skills amongst employees.
Hire at least four staff. Also, one of them should hold a degree in Tourism and Travel Management from an AICTE-accredited institution.
When employees have outstanding experience, academic criteria can be highly lessened.

Fees and Taxation

The agency must have submitted its IT returns for the year it is applying for recognition.
In addition, you've to pay a fee of INR 3000 while applying for recognition.

Although not essential, being well-known as a travel agent by the Indian government is advantageous. The scheme ensures the application of best practices and high service and quality standards in the tourism industry. Also, the travel agent requirements differ from country to country.

Experts project that the job market for travel agents will grow by 5% from 2020 to 2030. Also, approximately 7,500 new travel agent jobs will emerge in the next decade. Also, the majority of openings will mostly arise from the need to fill positions.

For an appointment as a recognized travel agent by the agency, there is a need to meet different criteria. It includes criteria related to investment in capital, staff employment, office space, and others. In addition to that, the Ministry of Tourism requires the application to be specifically made in the specified format.