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Cancelled flight ticket? Airline to refund & claim it

By · Published by Everything Blog

In short

The Goods and Services Tax Appellate Tribunal's Ernakulam Bench decided in favour of Singapore Airlines on October 16, 2026, ordering authorities to release withheld tax refunds. The directive mandates that the tax department pay interest calculated from the initial application date until final disbursement. Tax officials had previously challenged the carrier's claims over time limits and difficulties tracing sales processed through IATA-registered travel agents. The tribunal upheld the airline's claim because comprehensive documentary proof confirmed the tax was fully returned to travellers.

Key points

  • Airlines can successfully claim government tax refunds on cancelled tickets even after st…: Airlines can successfully claim government tax refunds on cancelled tickets even after standard credit-note deadlines expire.
  • Carriers must maintain verifiable documentary evidence proving that the entire tax amount…: Carriers must maintain verifiable documentary evidence proving that the entire tax amount was returned to the customer.
  • Recovering these deposited levies prevents unadjusted taxes from becoming an operational…: Recovering these deposited levies prevents unadjusted taxes from becoming an operational business expense for commercial airlines.

Sources checked by our analysis pipeline: 1

The Goods and Services Tax Appellate Tribunal (GSTAT), Ernakulam Bench, in a recent judgement has allowed refunds of GST collected on air tickets which were subsequently cancelled. This judgement came in the background of several appeals filed by an airline after it said that it had collected GST on airline tickets on passenger’s behalf but since the tickets were subsequently cancelled the airline had to refund the ticket fare and GST so collected but by the time the GST was refunded the airline had already deposited the collected GST with the government. This is why the airline wanted a refund of GST so paid to the government since the passengers already got back their paid GST on the air ticket.

The GST department did not accept this refund request because as per them the airline could not adequately demonstrate that the GST component had actually been refunded to passengers. The GST department also argued that most tickets were sold through IATA-registered travel agents so it is difficult to establish a direct connection between the travel agent, passenger, cancelled ticket and…

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