GSTAT Clears GST Refunds on Cancelled Flight Tickets When Passengers Are Fully Repaid
What Happened
The Ernakulam Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) ruled that airlines can claim refunds of GST paid on cancelled tickets if they have refunded both the fare and GST amount to passengers and can prove it with supporting records. In a case involving Singapore Airlines, the tribunal approved refund claims totaling ₹45.92 lakh for tickets cancelled between October 2019 and March 2021 during the Covid-19 disruption and directed the tax department to process the refund with applicable interest within two weeks.
Key Takeaways
The ruling reinforces that GST should not remain a cost when an underlying transaction is cancelled and customers are fully reimbursed. The decision also highlights the importance of maintaining detailed documentation linking ticket cancellations, tax payments, and passenger refunds.