The Directorate General of Civil Aviation (DGCA) has issued revised Civil Aviation Requirements (CAR) to streamline the airline ticket refund process and protect passengers from unfair practices.
The updated norms, effective March 26, 2026, come amid rising complaints over refund delays and the practice of retaining refund amounts in “credit shells.”
Defined Timelines for Refunds
Under the new rules, airlines must follow strict timelines based on the original mode of payment:
- Credit card payments: Refunds must be credited within seven days of cancellation.
- Cash transactions: Refunds must be made immediately at the airline office where the ticket was purchased.
- Bookings through travel agents or online portals: The responsibility for processing refunds lies with the airline, which must complete the process within 14 working days.
48-Hour ‘Look-In’ Window
To enhance passenger flexibility, the DGCA has introduced a mandatory 48-hour “Look-in” window. Passengers can cancel or modify their bookings without additional charges within 48 hours of purchase, provided the flight departure is at least seven days away for domestic flights and 15 days away for international flights.
Mandatory Tax Refunds and Cap on Charges
Airlines must refund all statutory taxes and fees — including User Development Fee (UDF), Airport Development Fee (ADF) and Passenger Service Fee (PSF) — in cases of cancellation or no-show. This applies across all fare categories, including promotional and non-refundable tickets (with respect to taxes).
Additionally, cancellation charges cannot exceed the combined amount of the basic fare and fuel surcharge. Airlines must clearly display cancellation charges at the time of booking and provide a detailed break-up of the refundable amount on the ticket or website.
No Automatic Credit Shells
The DGCA has clarified that refund amounts can be held in a credit shell only at the passenger’s discretion. Airlines cannot adopt this as a default practice.
Focus on Passenger Protection
The regulator noted that these measures were introduced to address growing dissatisfaction among passengers regarding refund procedures. While it does not intend to interfere with airlines’ commercial decisions, the DGCA emphasised that the rising number of complaints over delayed refunds and forced adjustments for future travel necessitated uniform minimum standards to safeguard passenger interests.