Quick Summary
In a move to curb GST revenue leakages from airlines, the government has enforced stricter data-sharing protocols effective immediately. Airlines must now share comprehensive passenger and booking data daily with tax authorities, according to revised regulations by the Central Board of Indirect Taxes and Customs (CBIC). This directive is aimed at reconciling passenger records with GST payments and ensuring full compliance on tickets, including those for no-shows and last-minute cancellations.
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FAQ :
The government has introduced new rules to curb GST revenue leakages from airlines, ensuring that GST collected on tickets, including cancelled ones, is properly remitted to the authorities.
Airlines must now submit passenger data 24 hours before departure and update it again at wheels-off time, with daily sharing of comprehensive data with tax authorities.
Previously, some airlines collected GST on cancelled tickets but did not remit it to the government, and businesses were claiming Input Tax Credit (ITC) on these unutilised tickets.
Passengers on economy class tickets are subject to a 5% GST, while those in business class face a 12% GST.
Yes, cancellation fees fall under the same tax rate as the principal supply of transportation, and airlines are expected to issue GST invoices even for cancelled services.
The measures will likely impose higher compliance costs for airlines but are essential for ensuring GST collected matches what is remitted, bolstering fiscal accountability and minimising tax evasion.
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