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Air cargo operators’ body urges govt to reverse GST paid on bad debt

Our Bureau Chennai | Updated on June 10, 2020 Published on June 10, 2020

The government must reverse the GST paid on bad debtors, as service providers are suffering huge losses following the Covid-19 lockdown, urged the Domestic Air Cargo Agents Association of India (DACAAI).

“On one side, there has been no business for the past 2.5 months, and on the other, due to the lockdown, we are not getting payments from our clients for services provided to them, said Amit Bajaj, President, DACAAI.

The industry is having its worst time with no cash flows during the lockdown, but the government’s policies are further accentuating its woes. During the pandemic, the sector had been the first casualty, with aircraft being grounded across the world. This is affecting the domestic air cargo service providers, pan India, he said in a release.

“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,” he said.

The association urged the government and the GST Council that dues paid on the bad debts should be re-credited back into the agents’ account. Either the government should consider charging GST only after the payments are realised, or refund such GST back to the agents, he said.

Initially, when the GST was introduced, it was assured by the government that if debtors do not pay within 90 days, they will reverse the GST credit and also take action against such defaulters, which will hasten the payments cycle. This has not been implemented by the GST Council so far and needs to be activated by the GST administration, he said.

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Published on June 10, 2020
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