GST paid on bad debts must be reversed: DACAAI

The Goods and Services tax (GST) paid on invoices that have become bad debts must be paid back, Domestic Air Cargo Agents Association of India (DACAAI) said on Tuesday.

Currently, as per the GST law, agents have to pay 18 percent GST upfront on the invoices. However, the spread of the novel coronavirus has increased the cases of bad debts.

“On one side, there is no business for the past two and a half months, and on the other, due to lockdown, we are not getting payments from our clients for services provided to them.” .

~Amit Bajaj, President, DACAAI

“As per the present GST law, we have already paid 18 percent GST on the invoices raised by us, but cases of bad debts have been increasing. This puts us in double jeopardy and our members are suffering huge losses as such.”

According to Bajaj, most of the DACAAI agents are small and medium enterprises and are on the verge of closing down the business due to losses being incurred by them.

Furthermore, he says, that in the current situation, airlines are insisting that charges be paid in advance.

“Our members are facing huge losses and lack of working capital as our payments are not forthcoming and GST is also stuck with the government,” Bajaj said.

“DACAAI urges the government of India, GST Council and all concerned that GST paid on the bad debts the same should be re-credited back into our account. Either Government should consider charging GST only after the payments are realised or refund such GST back to us.”

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