How to avail Input Tax Credit of GST on Airline Bills

[Guest]

We are a manufacturer of goods and for the business purpose we often use Airline Services for business travelling. Some Airlines use word K3 Tax for GST amount. Now the question is how can we get ITC of such GST amount where as it is not confirmed that whether it is CGST & SGST or IGST. What is the current practice which others are following in the new GST regime? how they are getting Invoices?

Pls. Advice

[PAWAN KUMAR]

Dear Sir,

K3 tax code is used for tax charged on airline invoice. Place of supply will be the schedule point of departure of Air Flight and the Location from where you are getting tickets.

So if you take an ticket booking from the counter at Delhi Airport and your schedule point of departure is also Delhi, The transaction will be intrastate and K3 charged on ticket will be portion of CGST+SGST as per my view.

[CSSANJAY MALHOTRA]

Mr. Joshi, for passenger transportation, Please refer to provisions as stated in Sec 12(9) and Sec 13(10) of IGST Act. Sec 12 is applicable if both service receiver / provider based in India or else Sec 13(10) is applicable. K3 code is single tax code used by Airlines. Indian Airlines are stating IGST or CGST+SGST on Invoice for domestic transportation and IATA uses K3 code in its Invoices. Furthermore, you will get the ITC reflected in your GSTR-2A/2.

Sec 12(9) of IGST Act: The place of supply of passenger transportation service to,-
(a) a registered person, shall be the location of such person;
(b) a person other than a registered person, shall be the place where the passenger embarks on the conveyance for a continuous journey:

Provided that where the right to passage is given for future use and the point of embarkation is not known at the time of issue of right to passage, the place of supply of such service shall be determined in accordance with the provisions of sub-section (2).

Explanation.––For the purposes of this sub-section, the return journey shall be treated as a separate journey, even if the right to passage for onward and return journey is issued at the same time.

Sec 13(10) of IGST Act : The place of supply in respect of passenger transportation services shall be the place where the passenger embarks on the conveyance for a continuous journey.

AI Summary

Place of supply rules govern input tax credit on airline services, determining whether invoices reflect intrastate or interstate GST. How GST input tax credit on airline bills depends on the place of supply and invoice tax composition. K3 is a single tax code used by airlines; whether tax is CGST+SGST or IGST follows place of supply rules for passenger transportation: for registered recipients, the place of supply is the recipient's location; for unregistered recipients, it is where the passenger embarks. Domestic journeys where booking and departure are at the same location are intrastate and treated as CGST+SGST. ITC appears in GSTR 2A/2 as reflected by airline or IATA invoices.