Air India has named the travel agents as its principal customer and asked them to share the task of dealing with GST related invoicing. This move will no doubt ease the workload of Air India. However, the travel agents might have to hire more people to perform the task.
According to GST, air travel of economy class is charged 5%, and the business class is charged 12%. The companies that are purchasing tickets for the employees would be able to ask for input tax credit or ITC. The companies need to issue tax invoice and upload this document to the GSTN portal to claim the credit.
Air India has issued a notice to all the travel agents last week saying that the new regulation would be effective from the 1st of September. In this notice, Air India has named the travel agents as the primary customer for all the air travel purpose under GST taxation system.
It is included in the notice that Air India would not be held responsible for any non-issuance or loss of GST invoice to the customers. All the responsibility of tax invoice issuance would be the travel agents.
Anita Rastogi (Partner – GST & Indirect Taxes at PwC) said that the notice would have to be examined by the law. Presently no other airlines company has issued such circulation.
This move from Air India would mean extra workload for the travel agent, and also extra expenditure would have to be made for the installation of software. The travel agent Federation has said that this move would improve performance as the travel agents would issue the invoice to their customers directly.
However, the airline company has not passed on its entire responsibility to the travel agents. They would issue the invoice to the travel agents, and the agents would issue this invoice to the customers. The carriage responsibility lies with Air India.