GST Appellate Tribunal rules in favor of Singapore Airlines refund

The GST Appellate Tribunal (GSTAT) has ruled that airlines are eligible to claim refunds for Goods and Services Tax (GST) paid on cancelled tickets, provided they have returned both the fare and the tax component to the passengers.

The decision follows a case involving Singapore Airlines Ltd. regarding eight refund claims totaling Rs 45,92,528 for the period between October 2019 and March 2021. During the COVID-19 pandemic, the airline cancelled numerous flights and refunded passengers, but was unable to adjust credit notes against output tax.

The Ernakulam bench of the GSTAT found “sufficient evidence” that the refunds reached passengers directly and that there was “no passing” of the tax incidence. The tribunal directed the revenue department to process the refund claim within two weeks, including applicable interest.