CBIC allows GST Refunds for event cancellations

In a big relief to the tourism, hospitality and entertainment sectors, the Central Board of Indirect Taxes and Customs (CBIC) has allowed for claiming of refunds of goods and services tax (GST) paid on advances that entities got for events or bookings that have since been cancelled. This move is set to benefit several companies across the board.

As per the CBIC Circular “In case GST is paid by the supplier on advances received for a future event which got cancelled subsequently and for which invoice is issued before supply of service, the supplier is required to issue a “credit note,” In cases where there is no output liability against which a credit note can be adjusted, registered persons may proceed to file a claim under “Excess payment of tax, if any”.

Similar principle will also apply where goods have been returned to the supplier but GST has been paid on the sale to the government.