The GST Appellate Tribunal has said that a Goods and Services Tax (GST) refund can be claimed on a canceled air ticket, provided the airline has refunded both the fare and GST to the passengers and has solid documentation to prove it. Ruling in the case of Singapore Airlines Limited v Kochi CGST and Central Excise Commissioner, the Kochi, Ernakulam Bench of the GST Appellate Tribunal held that there was sufficient evidence to ensure that the refund of canceled tickets would go directly to the passengers concerned and not be burdened with tax.

When is the talk?

The tribunal directed the revenue department to settle the airline’s refund claim with interest within two weeks. The case is from October, 2019 to March, 2021 by Singapore Airlines for a total of Rs. 45,92,528 related to eight GST refund claims. During that time, the airline had to cancel flights due to Covid-19 and refund fares and GST to passengers. The GST Joint Commissioner had earlier rejected the refund claim, after which the appellant approached the tribunal.

This order was given

Setting aside the order of the Joint Commissioner (Appeals), the tribunal in its order dated October 16 said that under the Supreme Court’s order, the appellant airline is eligible for refund of GST collected from passengers due to cancellation of flights due to the Covid-19 pandemic and paid to the GST department, which has paid the full amount including GST to the passengers. Rahul Shekhar, Indirect Tax Partner, Nangia Global, said the decision is a positive development for the industry as where the transaction is canceled and the tax collected is fully refunded to the customers, GST should not be applicable.