The GST Appellate Tribunal (GSTAT) has ruled that GST paid on cancelled airline tickets can be claimed as a refund if the airline has returned both the fare and GST to the passengers, along with supporting documents to prove it. This decision was made in the case of Singapore Airlines Ltd. v/s Kochi Commissioner of CGST & CE.
Key Ruling Details
The Ernakulam bench of GSTAT found that there is "sufficient evidence" to ensure that the refund of cancelled tickets has reached the respective passengers directly, indicating that there is "no passing" of the incidence of tax. The tribunal directed the revenue department to process the refund claim of the airline within two weeks and make payment along with interest.
The case involves eight GST refund claims totaling Rs 45,92,528 by Singapore Airlines for the period between October 2019 and March 2021. During this time, due to the COVID-19 pandemic, the airline had to cancel flights and returned fares and GST to passengers. However, it could not adjust the credit notes against output tax.
Background of the Case
Initially, the GST Joint Commissioner rejected the refund claims, prompting the appellant to approach the GSTAT. In its order dated October 16, the GSTAT set aside the Joint Commissioner’s order, stating:
