Non-resolution of the issue could dampen and risk India’s aviation potential, it added.
International carriers including Emirates, British Airways and Lufthansa were served notices over the past few days over import of services by Indian branch offices, ET reported on Tuesday.
The notices are for the period when GST was rolled out from July 2017 to March 2024, the report said.
Airlines are not covered by a June 26 circular on valuation of supply of import services by a related person, where the recipient is eligible for full input tax credit, IATA added.
IATA said nowhere else in the world do airlines face this, and Indian carriers operating overseas do not face similar tax demands.”IATA is disappointed that India’s Directorate General of GST Intelligence (DGGI) has proceeded to issue show cause notices to some foreign airlines operating to India, despite a number of representations made by the industry on this matter. 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. It does not take into consideration the nature and conventions involved in the provision of international air transport. Furthermore, India is alone in its approach – nowhere else around the world is this practised,” IATA’s regional vice president for North Asia and Asia Pacific Xie Xingquan said in a statement.The global airline body said the international nature of air transport necessitates a clear and consistent policy framework globally.
German airline Lufthansa said it was supporting the inquiries and has provided all the requested data to DGGI. “We are assessing this topic very closely and will continue to cooperate with local authorities, ” a spokesperson said.
