How to Start a Travel Agency in India

If you know anything about the tourist industry, then you’ll want to start a travel agency in India. But why start one in India? Statistics from the United Nation’s World Tourism Organization reveal why.

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India’s tourism industry – the 12th-largest in the world – accounts for about 8{d31bfd3129a37ab7539d725cdfe8b36c37184f7607af4d39a10f904fafd76e63} of the country’s GDP or $118 billion. And by 2022, this figure will rise to roughly $420 billion. So, get a piece of this action, start a travel agency. And here’s how.

1. Register Your Business

Your journey to own a travel agency begins when you register a business entity. But which one should you choose – a PLC, an LLC, or an OPC? If you have enough capital and want to quickly grow your business, opt for a Private Limited Company (PLC). In fact, most travel agencies fall under this category.

On the other hand, if you have less capital and are in no rush to grow your business, go for a Limited Liability Partnership (LLP) instead. What’s more, this entity has no audit requirements if you earn less than 40 lakhs annually. But the One Person Company (OPC) boasts of the least compliance requirements, making it a perfect entity if you intend to work alone.

2. Get a Trademark

Like with all businesses, your brand says a lot about you, especially in today’s digital world. Remember, as they do their research and make their bookings online, tourists will first interact with your brand. So, as you register your business entity, also register your trademark.

3. Register as an Agent

So why should you register as an agent? After all, you can still charge commissions even without registration. That may be true, but international tourists are very particular about a travel agency’s credentials.

Without registration, few will either trust you or work with you. So, to work locally, register with the government after complying with its regulations regarding office space, employee numbers, and minimum capital, among others.

But, if you want to scale up your travel agency and work with international tourists, also register with IATA (International Air Transport Association). This body represents more than 240 airlines, giving you access to benefits like commissions for cheap flights from Hyderabad to Delhi and any booking you make for a client.

4. Register for Service Tax

By law, all travel agencies must register for the service tax. So, does this mean you’ll have to pay tax even though you’re a small business? Not necessarily so. As a small OPC or LLC, you’re eligible for tax exemption if you earn less than Rs. 10 lakhs a year.

Even when you do exceed Rs. 10 lakhs, you’re taxed based on the services you offer, not always on the usual 12.36{d31bfd3129a37ab7539d725cdfe8b36c37184f7607af4d39a10f904fafd76e63} rate. Likewise, domestic and international air tickets are also taxed at 0.6{d31bfd3129a37ab7539d725cdfe8b36c37184f7607af4d39a10f904fafd76e63} and 1.2{d31bfd3129a37ab7539d725cdfe8b36c37184f7607af4d39a10f904fafd76e63} respectively.

Conclusion

Starting a travel agency in India is easier than many may think. Begin by registering your business as a PLC, an LLC, or an OPC. Next, register a trademark with which to market your business. Then, register either as a government-approved agent or an IATA agent. Finally, register for service tax.