GST notices to foreign airlines could “dampen India’s aviation potential”, warns IATA

DGGI sends show-cause notices to 10 foreign airlines for alleged non-payment of ₹10,000 crore GST dues, IATA expresses disappointment.

The global trade body for airlines has expressed its “disappointment” over show-cause notices to 10 international airlines over GST dues of ₹10,000 crore, which it has called “flawed”. It has warned that the move could “dampen and risk India’s strong aviation potential”.

The Directorate General of Goods and Services Tax Intelligence (DGGI) has sent show-cause notices to 10 foreign airlines offering flights to the country for alleged non-payment of tax amount to ₹10,000 crore for providing services such as aircraft maintenance, as well as payments for crew and rentals from their headquarters to their unit in India. The airlines include British Airways, Lufthansa, Oman Air, Emirates and Singapore Airlines

“The DGGI’s assertion that GST should apply to expenses incurred by the headquarters of foreign airlines [with a branch office in India] in the course of providing air transport services is flawed,” said Dr Xie Xingquan, International Air Transport Association’s Regional Vice President for North Asia and Asia Pacific, in a press statement, adding that the tax authority does not take into consideration the nature and conventions involved in the provision of international air transport.

The senior representative said that IATA was disappointed that India’s DGGI has procceded to issue showcause notices despite a number of representations made by the industry on this matter.

IATA has also urged the Government to urgently help resolve this matter, which “can dampen and risk India’s strong aviation potential”, it has warned.

It says India was alone in its approach. “Nowhere else around the world is this practiced. Indian carriers operating to destinations outside India do not face similar situations or demands,” said Mr Xie.