Seeking remedy on undue practices on refunds, the Travel Agents Association of India (TAAI) has reached out to airlines seeking clarifications on excess GST (K3) charged on air ticket cancellations and changes. In a communication addressed to all the airlines and various ministries, the association informed that travel agents have been overcharged K3, the cancellation change fees as 18 per cent in place of 5 per cent (in the case of the economy) and 12 % (business) class.

While seeking refund of excess K3 for travel agents, TAAI said that a huge amount is being wrongly collected in the name of K3. 

In the letter, Jyoti Mayal, President, TAAI and Mehboob Sheikh, Chairman – Taxation Council, TAAI submitted the request to all the airlines and various ministries on behalf of members and the entire travel trade community. 

“Please be informed that we the travel agents have been overcharged K3, the cancellation and change fees as 18 per cent in place of 5 per cent (in the case of the economy) and 12 per cent (business class). These rates were applicable right from the day of inception of GST. Thus, a huge amount was wrongly collected in the name of K3. Honestly, we the fraternity extending services to travellers are not even informed about how much went to the exchequer or have clarity on the taxation applied,” mentioned Mayal. 

On the matter, Sheikh stated, “With reference to Circular No. 178/10/2022-GST dated August 3, 2022, regarding the GST applicability on liquidated damages, compensation and penalty arising out of breach of contract or other provisions of law – reg. To be specific points 7.1.6 and 11.4 which refer to payments, refunds, cancellations, and service contracts impacting the travel trade businesses.”