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GSTAT Allows GST Refund on Cancelled Airline Tickets
GSTAT rules airlines can claim GST refunds for cancelled tickets if fare & GST are returned to passengers, setting a precedent for the industry.
GSTAT ruled that GST paid on cancelled airline tickets can be refunded if the airline returns both the fare and the GST to passengers and has supporting documents to prove it.
The decision was made in the Singapore Airlines Ltd. v/s Kochi Commissioner of CGST & CE case, at the Ernakulam bench of the GST Appellate Tribunal (GSTAT).
The ruling centers on eight GST refund claims totaling Rs 45,92,528 for flights canceled between October 2019 and March 2021 due to the COVID-19 pandemic.
The tribunal found sufficient evidence that the refunds reached the passengers directly and that there was no passing of the tax incidence, directing the revenue department to process the refunds within two weeks along with interest.
Industry reaction highlighted that GST should not be a cost in cancelled transactions, provided taxpayers maintain robust passenger-level documentation linking invoices, credits, and refunds.
The decision emphasizes the need for field formations to consider supporting documents collectively rather than dismiss genuine refund claims on technical grounds.