Quick Summary
In a recent move, the Directorate General of Goods and Services Tax Intelligence (DGGI) has launched investigations into airlines retaining taxes collected from customers in no-show scenarios. This inquiry addresses whether airlines can rightfully keep taxes, including GST, when passengers fail to b
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FAQ :
The DGGI is investigating airlines for retaining taxes, including GST, from passengers who fail to board their flights (no-shows).
Economy class tickets are taxed at 5% GST, while business class tickets are taxed at 12% GST.
Government sources and industry experts suggest that taxes collected in no-show scenarios should be refunded to the customer, as no airline service was provided.
There is a debate on the appropriate tax rate for the portion of the ticket price that airlines retain when a passenger is a no-show, with suggestions that it should be taxed differently or at 0%.
Yes, one airline has already paid tax following DGGI scrutiny, potentially setting a precedent for other airlines.
The DGGI's investigation could lead to clearer guidelines on GST refunds for no-show passengers and significant changes in how airlines handle these taxes, impacting their financial practices and customer relations.
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