GST paid on bad debtors must be reversed: DACAAI

GST paid on invoices which have become bad debts must be paid back, Domestic Air Cargo Agents Association of India (DACAAI) said on Tuesday.

At present, under the GST law agents have to up front pay 18 per cent GST on the invoices. However, due to the outbreak of Covid-19, the cases of bad debts have been increasing.

“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,” DACAAI President Amit Bajaj said.

“As per the present GST law we have already paid 18 per cent 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.”

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

Furthermore, he pointed out 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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