Airline refund in your portal wallet: what you owe the client

Your client forwards the airline's own refund SMS: "Refund processed, aa gaya hoga aapke paas?" It hasn't. The money sits as a line in your B2B portal wallet statement, not your client's bank account, and since DGCA's 9 February 2026 circular told airlines, agents and portals to put the passenger's own mobile number and email on the booking instead of the agent's, your client may well see that message before you do.

This post covers what you owe once an airline refund reaches you: whether the airline's duty still shields you, when to pay out versus front the money, whether you can keep your fee, what changes if the airline has shut down, and a worked calculation with a copy-paste register. As of October 2026, parts of this are genuinely unsettled, so read it alongside your CA.

Once the refund is in your wallet, it is the client's money

DGCA's rules put the refund duty on the airline when a ticket was bought through an agent or portal, not you. But once the airline pays into your BSP or portal account, 2026 commissions have started treating holding onto it as your deficiency.

Under DGCA's Civil Aviation Requirement (CAR) on ticket refunds (Section 3, Series M, Part II, in force from 26 March 2026), on agent or portal tickets the "onus of refund shall lie with the airlines as agents are their appointed representatives," and the airline must complete the refund process within 14 working days. That governs the airline's side, and says nothing about what happens once the money lands with you; no order here decides whether crediting your wallet counts as "completed."

Three 2026 orders show what happens once the agent or portal holds the money:

• West Bengal (2 July 2026): Emirates refunded ₹6,02,132 for COVID-cancelled business-class tickets, and the order records it reaching the booking agent via a consolidator in July 2020. The clients found out in August 2022; the agent's response on record was an email claiming they had agreed to "settle" it in upcoming bookings, and the agent never appeared to defend the case. Emirates was let off as a proforma party; the agent alone was ordered to pay ₹6,49,960 plus ₹50,000 compensation and ₹30,000 costs.
• Chandigarh (7 October 2026): an agency received ₹1,29,199 per ticket from Air India on three Amritsar-Delhi-Toronto tickets after the onward flight was cancelled amid West Asia tensions, and paid the client ₹1,27,000 each, keeping ₹2,199 a ticket. The State Commission upheld an order making the airline and the agency jointly liable for a further ₹1,08,997 at 9% interest from the date the client engaged the agency, plus ₹15,000 compensation and ₹10,000 costs, and said the geopolitical-tensions argument "does not absolve them of liability towards the consumer."
• Bengaluru, per LawTrend's 1 October 2026 report: a portal deducted its convenience fee and parked the rest in the client's wallet on the portal when a bank transfer failed. The commission ordered the portal and the airline to pay the full ticket amount anyway.

In its 2020 lockdown-refund directions, the Supreme Court said that where an airline refunds a lockdown-period ticket booked through an agent, "the amount shall be passed on immediately by the agent to the passengers." The 2026 orders reach the same result, two of them outside COVID. None bind every forum (state orders are persuasive, not nationwide precedent), but three commissions landing the same way, all reported since July, is hard to wave off; see our pattern of consumer-court orders against travel agencies.

When the refund has not reached you: where commissions disagree

Not every order makes the agent liable. The fact that most often separates them is whether the airline's money had reached the agent or portal.

Telangana (19 May 2026) held an OTA liable for a ₹18,597 Jet Airways ticket even after Jet had stopped flying and insolvency proceedings were pending. It said DGCA's refund circular, while it governs dealings between airline and agent, "does not curtail the jurisdiction of the Consumer Forum nor absolve the Appellant of its responsibility towards the consumer," that the consumer "cannot be relegated to pursue remedies only against the airline," and that the agent "had a continuing obligation to assist in refund processing." Upheld: the refund with 9% a year interest from the December 2018 booking date (about ₹12,473 by the order date), plus ₹10,000 compensation and ₹3,000 costs.

Two other orders went the other way. Punjab (25 August 2026) limited a portal's liability to the hotel portion of a package after Go First cancelled the flights amid its own insolvency; no airline refund had reached the portal, and the commission cited the CAR's "onus of refund" line and the IT Act's safe-harbour clause. The National Commission (28 October 2025), in a schedule-change case, quoted the same line, found only a "partial deficiency" in not passing on the reschedule, and set aside ₹50,000 compensation per complainant.

Takeaway: "the airline is responsible" is an argument for your escalation desk, not a defence you can count on before your client's commission. A dated, written chase file is your evidence of the "continuing obligation to assist" Telangana described; it may not get you off, but silence produced the West Bengal result above. Delhi's State Commission, per LiveLaw's Q1 2026 digest, held that COVID-era cancellations under government restrictions were not themselves a deficiency: these orders punish what happens to the money afterward. For the CAR's text and its 14-working-day clock, see our rundown of DGCA's 2026 refund rules.

Wallet credit is not a credit shell, and it is not your float

An airline credit shell is the airline's instrument, and taking one is the passenger's choice under the CAR. A B2B portal wallet balance is different: your ledger with the portal, never mentioned in the CAR. Turning it into "use it on your next booking" needs your client's written yes, not your assumption.

The CAR says holding the refund in a credit shell "shall be the prerogative of the passenger and not a default practice of the airline," written for airlines issuing credit shells. But the logic travels: if the airline can't decide this for the passenger, neither can you.

The general law of agency agrees, though no order here has settled whether it governs an agent this way. Under the Indian Contract Act, out of sums received for the principal "in the business of the agency," an agent may retain only advances and expenses properly incurred in that business and its own remuneration, and must pay over the rest; its lien covers only commission, disbursements and services "in respect of the same." In West Bengal, the agent's claim that the clients had agreed to settle against future bookings was never proved, and did not help.

This cuts both ways: during 2026's West Asia disruption, TAAI's Airline Council chair told TravTalk that some airlines were giving agents wallet credits instead of refunds, which "locks working capital for agents." If that's happening to you, raise it with the airline or portal; it's not grounds to hold the client's money as "credit" without asking. See our guide to reconciling a B2B portal wallet for month-end mechanics.

Pay on receipt or front it: decide with arithmetic

Pay out every refund within a fixed window of it reaching you, a house rule stated on your receipt. Fronting before the airline or portal pays is different: you're lending the airline money, so decide it on client value and cost of cash, not on how loudly they ask.

The Consumer Protection Act lists as an unfair trade practice refusing to refund the consideration for a deficient service "within the period stipulated in the bill or cash memo or receipt," or within thirty days if none is stipulated. No order here applies that clause to an airline refund, but it is the reason to state your own period (two or three working days from the credit is defensible).

Situation	Default	Why
Airline-cancelled, already credited	Pay now, within your window	Already the client's money
Airline-approved, not yet credited	Front only high-value or repeat clients; else a written date update	Fronting is unsecured lending to the airline or portal
Client-cancelled, pending with supplier	Pay on receipt, no fronting by default	The wait is the supplier's, not yours
Airline insolvent	See the next section	Different maths and defences

Front 20 cancelled tickets at ₹45,000 (₹9,00,000) and get paid back 45 days later: at an illustrative 12% overdraft rate, that costs about ₹13,315. In the orders above, a disputed refund drew 9% a year interest in two cases (on ₹45,000, that is ₹4,050 a year) and ₹10,000 to ₹50,000 in compensation, plus costs. Both are illustrative, but a fast, disclosed payout policy usually beats fronting everything or sitting on the money.

Keeping your service fee when the airline cancels

Only a fee disclosed in writing at booking has any real cover, and commissions have gone both ways even then. Chandigarh's award left out amounts "relatable to service charges"; Bengaluru ordered the full ticket amount despite a deducted convenience fee.

The CAR caps any cancellation charge by the airline or its agent at basic fare plus fuel surcharge, excluding "any charges levied by the travel agent, which have been fully disclosed at the time of booking." It also bars airlines from levying any additional charge to process the refund, which binds airlines, not the portal between you and the airline; its own deduction is your channel cost, not grounds to short the client.

Refund your fee too, and refund its GST with it. Under Section 34(2) of the CGST Act, a credit note cuts your output tax only if a GST-registered client reverses the matching input credit or, for anyone else, the tax was not passed on, which in practice means the GST goes back with the fee. Declare it by 30 November after the financial year of the supply, or the annual return date if earlier. Check corporate-client mechanics with your CA.

House rule: airline-caused, no rebooking done, refund the fee with the fare. Client-caused, or already rebooked, keep the disclosed fee as a separate line in the breakdown. See our piece on cancellation terms that survive consumer court for wording that holds up.

The airline went bust: the fare is still your problem

An insolvency moratorium stops proceedings against the airline itself; nothing in it shields the agent who sold the ticket. At least one 2026 commission, Telangana above, has refused to send a passenger chasing the airline's insolvency instead of the booking agent.

Go First's insolvency ran from NCLT admitting its own petition on 10 May 2023 to a liquidation order on 20 January 2025, upheld on appeal on 4 April 2025. The IBC's moratorium bars suits and proceedings "against the corporate debtor," and that debtor is the airline, not you.

Three positions, not one rule:

1. Refund already reached you: pay out on your stated window.
2. Airline slow but solvent: a written, dated chase file, written updates, refund your fee if no work remains, front case by case.
3. Airline insolvent: Punjab limited a portal's liability on Go First tickets where no refund had reached it; Telangana shows that isn't guaranteed. We haven't verified whether or how refund claims can still be lodged with Go First's liquidator, so promise a chase file, not a date.

Worked example: what the client gets back

Example (hypothetical figures, real calendar): Three passengers book Mumbai-Dubai return via a B2B portal, Monday 5 October 2026. Airline fare: ₹42,000 each, ₹1,26,000 total. Agency fee, disclosed before ticketing: ₹1,000 per passenger plus 18% GST, ₹3,540 in all. Client paid ₹1,29,540.

The airline cancels the outbound flight; the client declines the alternative and wants a refund. The airline refunds the full fare, ₹1,26,000, since it caused the cancellation: no cancellation charge, no airline processing fee. The portal credits the wallet ₹1,25,250 on Tuesday 3 November, after a hypothetical ₹250-per-passenger fee of its own (₹750), under the agency's own agreement with the portal.

Floor owed to the client: ₹1,26,000; the ₹750 is the agency's cost. Keeping the disclosed fee, the client gets ₹1,26,000; refunding it too, the client gets ₹1,29,540, and the agency issues a credit note for ₹3,000 plus ₹540 GST, declared by 30 November 2027 at the latest (earlier if the 2026-27 annual return is filed first). Either way, a two-working-day house rule means payment by Thursday 5 November, UTR and breakdown attached.

Example (the West Bengal case, real figures): Received by the agent from the airline, via a consolidator, in July 2020: ₹6,02,132. Ordered in July 2026: ₹6,49,960 plus ₹50,000 plus ₹30,000, ₹7,29,960 total: ₹1,27,828 more than had come in, six years after the airline paid.

The refund register and the messages to send

One register, one row per PNR. Never let a refund's status live only in a WhatsApp thread.

Client | PNR | Ticket no(s) | Airline | Cancelled by (airline/client) |
Refund requested on | Airline refund amount and date (from portal/BSP
statement) | Credited to us: amount and date | Deductions, each separate
(airline penalty / portal fee / our disclosed fee) | Due to client |
Date promised to client | Paid on | UTR / mode | Consent reference if
held as credit | Status

Five status values, in order, nothing else: Requested (asked the airline/portal to action it), Filed with airline/portal (logged, with a reference), Approved by airline (agreed, money not moved), Credited to us (reached your BSP or wallet), Paid to client (client has the money).

The rule that matters more than the headers: never send a client "processed" before status 5.

Script A, filed but not credited:

Hi [Name], your refund for PNR [X] was filed with [airline/portal] on [date], reference [ref no]. [Airline]'s target for agent-booked tickets is 14 working days. I'll message again once it's credited to us, with the transfer reference, not another status word.

Script B, credited and paid:

Hi [Name], [Airline] refunded ₹[X] for PNR [Y] on [date], reaching us [date]. We've transferred ₹[Z] to account ending [####], UTR [UTR number]. Breakdown: refund ₹[X], less [fee, if any], paid ₹[Z].

Script C, offering or asked for credit instead of cash:

Hi [Name], your ₹[X] refund for PNR [Y] is ready. We can pay it now, or hold it as credit against [a named trip], usable until [date]; ask for it back in cash any time before then.

Consent-for-credit text, for the client to reply "I agree" to, or sign:

I, [name], ask [agency] to hold ₹[amount], the airline refund on PNR [X], as credit for [named booking / travel by date]. I can ask for it in cash at any time before it is used, and it will be paid within [X] working days of my request. Any unused balance will be paid to me by [date].

A named booking stops "credit" drifting into a general IOU; the cash-out right carries the CAR's "prerogative of the passenger" idea over to you; the end date stops a balance sitting unresolved for years, as in West Bengal.

Pass-through clause, for your terms or invoice footer:

Airline refunds: when an airline refunds a ticket we issued, we pay you the amount we receive within [X] working days of it reaching us, less only the fees shown on your invoice at booking. We do not hold a refund as credit, or adjust it against any other amount, without your written consent.

The stated period is the "period stipulated in the bill" the Consumer Protection Act refers to; "fees shown on your invoice" keeps your fee within the CAR's carve-out for charges "fully disclosed at the time of booking"; "written consent" is what the West Bengal agent claimed and never produced.

Common questions

Refund wallet mein aaya hai, client ko kab tak dena hai?

As soon as your stated payout window allows, typically two or three working days. The Consumer Protection Act's unfair-trade-practice clause looks to the refund period stated on your bill, and to thirty days where none is stated; sitting on a credited refund is what 2026 orders have penalised.

Client ka refund agle booking mein adjust kar sakte hain?

Only with the client's written agreement, to a specific booking, with a cash-out date. Under the CAR, credit instead of cash is the passenger's choice, not a default; the West Bengal agent who claimed consent without proof was ordered to pay nearly ₹1.28 lakh more than had been received.

Can you deduct your service charge if the airline cancelled the flight?

Only if disclosed in writing at booking, and it's still a live risk. Chandigarh's award left out service charges; Bengaluru ordered the full amount despite a deducted fee. Disclosed, with no further work done, still leans toward refunding it.

Airline band ho gayi, refund hum dein kya?

If it already reached you, pay it; insolvency doesn't change whose money it is. If it's stuck with the airline, Telangana held the OTA liable anyway, interest running from the booking date; "the airline folded" hasn't been a reliable defence alone.

The airline says refund processed but the portal shows nothing: what do I tell the client?

Say exactly that: filed and approved with the airline, not yet credited to you, with the filing date and reference. Don't repeat "processed"; that gap is the pattern the orders above punish.

The short version

• Once an airline's refund is credited to your wallet or BSP account, 2026 orders treat it as the client's money sitting with you, whatever the CAR says about whose "onus" it originally was.
• Pay out within a window stated on your invoice (two to three working days from the credit is defensible); the Consumer Protection Act's unfair-trade-practice clause falls back to thirty days if your bill states none.
• Hold a refund as credit, or set it off against anything, only with written consent naming a specific booking and an end date; a wallet balance is not a credit shell.
• Fronting a refund before the airline pays is a financing decision, not a courtesy; weigh interest cost against client value.
• Keep only a fee disclosed in writing at booking; if you refund it, return its GST too, through a credit note declared by 30 November after that financial year (or the annual return date if earlier), and check GST-registered clients with your CA.
• An insolvency moratorium protects the airline from lawsuits, not you; document every chase in writing rather than banking on its collapse as a defence.
• Run one refund register per PNR, five statuses ending in "Paid to client," and never send "processed" before that's true.