Airline entitled to refund of GST on tickets cancelled during COVID-19 where full fare including GST was returned to passengers; eight appeals allowed with interest: GSTAT Ernakulam

The Tribunal held that unabsorbed credit notes which could not be adjusted after the Section 37(3) cut-off are refundable, and that the post-October 2025 ITC-reversal proviso to Section 34 does not apply to the 2019–21 period.

The Goods and Services Tax Appellate Tribunal, Ernakulam Bench, has allowed eight appeals of an international airline and directed refund of Rs. 45,92,528 with interest from the date of the original applications [Singapore Airlines Ltd v. Commissioner of CGST & CE, Kochi].

The Bench of Vice President Subramanya Rayaprol and Ramamoorthi Sriram (Technical Member) noted that between October 2019 and March 2021, pandemic cancellations caused refunds to exceed sales. Since GSTR-3B does not accept negative values, the credit notes were carried forward and, once the time limit under the first proviso to Section 37(3) expired, refund claims were filed.

The Tribunal examined the IATA Billing and Settlement Plan mechanism, under which ticket refunds can only be made by the original selling agent through the original payment mode, and found that ticket copies, credit notes bearing passenger names and GST details, and BSP files established that the entire fare including GST reached each passenger.

On unjust enrichment, the Tribunal held that the proviso requiring reversal of ITC by the recipient was inserted only with effect from 01.10.2025 and could not apply to the disputed period. Customers were largely B2C, a Rule 89(2)(l) declaration was on record, and the Revenue produced no evidence of any B2B recipient. The credit notes satisfied Section 34(2), and the refunds were to be processed within two weeks.

2026-juristway.com-3016-GSTAT(Ernakulam)-GST  |  GSTAT, Ernakulam  |  16.10.2026