Air India, to reduce the workload of the airline, has dubbed Travel Agent – its principal customers to shoulder the task of the goods and service tax-related invoicing of corporate customers. To fulfill the said responsibility, Agents may need to hire more man-force.

 As per GST law, the taxes on economy-class air travel and business-class travel is charged at 5% and 12%, respectively. The companies purchasing tickets for its staff members can claim the Input Tax Credit on tax payment by the issuance of a tax invoice with the GSTIN number on it to be uploaded over the GST portal. The said invoicing system shall be handled by the Travel Agents, as reported by Travel Industry sources.

A circular has been circulated by Air India for the implementation of the new procedure w.e.f. September 1. The circular categorizes travel agents as its principal customers for purpose of air travel under the GST. “Air India shall not be responsible for non-issuance of tax invoice or loss of GST credit, if any, to the end customers. All such responsibilities shall rest with the agents,” the airline said in the circular. However, the said communication requires the examination from the legal point of view, believed by people. Although no other airline has issued similar instructions, agents expect other airlines to follow the suit.

The said move shall add to the workload of the agents and more investment in software and manpower. “Even now we are issuing tax invoice on service or transaction charges to our customers and airline would have issued another invoice for a ticket. So that duplicity is avoided now. Also, it is good from the perspective of client confidentiality as the airline will not send tax invoice directly to our customers,” an executive member of the Travel Agents Federation of India said.

“It is amply clarified that Air India has not decided to pass on its responsibility to the travel agents,” the airline said in a response to a query. “Air India will issue tax invoice to the agent, and in turn, such agents will be required to issue tax invoices to the end customers. In short, the tax invoice will be issued to the GSTN provided at the time of booking, which could be either the agent or the end customer. However, the responsibility of carriage lies with Air India.“

Sources –Business Standard

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