Ethiopian Airlines on GST implementation
The Indian Government has announced the implementation of the Goods and Service Tax Act (GST) effective from July 01, 2017. GST will replace the existing Service Tax (JN), Swachh Bharat Cess (SBC) and Krishi Kalyan Cess (KKC). GST will be applicable for sale worldwide for any travel originating from India.
The major change in the taxation of the “Travel of passenger by air” is the requirement of collecting business data for all B2B purchases. In order to support our business partners and ensure all eligible customers purchasing ticket from “Ethiopian Airlines” (ET) are able to claim GST credit, ET has established the following practice:
- Eligible customers who will be seeking GST credit are requested to provide their GST information for all of their business locations as follows:
2. Any ticket where travel originates in India, regardless of point of sale, paid for by a business registered for GST (“B2B” transactions), the airline must send a GST invoice to the business within 30 days of the date of ticket issuance regardless of the form of payment. This invoice must include the GST Number, Name and Address of the business entity Registered for GST. These will differ from the passenger’s own name and address.
- The IGST rates for air transport were announced after the most recent GST council meeting on 18-19 May 2017. These are:
- 5% of base fare + YR, for air travel in economy class.
- 12% of base fare + YR, for air travel in all cabins other than economy.
Refund/cancellation will be charged with full amount of GST at 18%.
- Tax Code: JN, G1 and F2 tax codes will be withdrawn w. e. f 01 July, 2017 and instead single interim ticket code “K3” will be used. The tax is to be collected at point of sale and shown separately on the ticket by code K3.
- Special Service Request (SSR) codes: An industry solution has been developed for capturing and transmitting this information. This involves four new industry standard
Special Service Request (SSR) codes:
GSTN – ‘Goods and Services Tax Number’ to collect the name and registered number of the business purchasing the goods and services.
GSTA – ‘Goods and Services Tax Business Address’ to collect the address of the business purchasing the goods and services.
GSTP – ‘Goods and Services Tax Business Phone Number(s)’ to collect the business telephone number(s) of the business purchasing the goods and services.
GSTE – ‘Goods and Services Tax Business Email’ to collect the e-mail address of the business purchasing the goods and services
The GDS companies have informed us that the above Special Service Request (SSR) fields shall be available by the 1st of July.
- In addition to the above SSR entries, ET also requires the GSTN number of the corporate (B2B) to be updated in the endorsement box of the ticket.
For all B2B purchases, at the time of ticketing, the GSTN ID must be entered in the ticket Endorsement box. This GSTN number should belong to the Corporate (B2B) for whom the agency is issuing tickets and not the agents own GSTN number.
To identify the correct identification of 15 digit alphanumeric GSTN, you are required to use the format as prefix GST followed by the Corporate GSTN (without any space) In addition to the above, the corporate codes are still required to be entered in the tour code field as usual for all B2B ticket purchases.
For Example, if the GSTN of the Corporate is “07AAAAA0000A1Z5”, then it should be entered in the endorsement box of the ticket as shown below.
Note: In the absence of providing both of the above information’s (SSR entries and ticket endorsement), the ticket purchased will not qualify as a B2B transaction and therefore will not be eligible for GST credit.
- The above procedure will be applicable on all ticket purchases, re-issuances, refunds effective 01 July 2017.