GSTAT Allows GST Refund on Cancelled Air Tickets, Orders Refund With Interest

The GST Appellate Tribunal (GSTAT), Ernakulam Bench, has allowed Singapore Airlines' GST refund claims of ₹45.92 lakh on cancelled flight tickets after confirming that passengers received refunds of the entire fare, including GST. In its order dated 16 October 2026, the Tribunal directed the GST Department to process eight refund claims within two weeks and pay applicable interest, holding that there was no unjust enrichment.

The Goods and Services Tax Appellate Tribunal (GSTAT), Ernakulam Bench, has granted significant relief to Singapore Airlines Limited by allowing GST refund claims amounting to ₹45,92,528 relating to flight tickets cancelled during the COVID-19 pandemic.

In its order dated 16 October 2026, the Tribunal held that GST paid on cancelled airline tickets is refundable where the airline has returned the entire ticket fare, including GST, to passengers and has sufficient documentary evidence to establish such refunds.

The dispute involved eight refund claims relating to October 2019 to March 2020, January 2021 and March 2021. Singapore Airlines had issued credit notes after cancelling flights but could not adjust the corresponding GST against output tax liability because of insufficient taxable sales.

The GST authorities had rejected the refund applications, questioning the supporting documents and the eligibility of the claims.

However, the Tribunal observed that the airline had produced sufficient evidence, including tax invoices, credit notes, passenger details, refund vouchers and IATA Billing Settlement Plan records, establishing that the amounts were refunded to passengers.

The Tribunal also relied on CBIC Circular No. 137/07/2020-GST dated 13 April 2020, which permits refund applications under the category of excess payment of tax through Form GST RFD-01 where credit notes cannot be adjusted against output tax liability.

The Bench, comprising Vice-President Subramanya Rayaprol and Technical Member Ramamoorthi Sriram, set aside the appellate order and allowed all eight appeals.

GSTAT directed the department to process the refund claims within two weeks and pay applicable interest from the dates of the original refund applications until actual payment.

The ruling highlights the importance of documentary evidence demonstrating that the tax burden has been returned to customers and that no unjust enrichment has occurred.

Source: CA Sansaar