India’s top tax authority, the Directorate General of Goods and Services Tax Intelligence (DGGI), reportedly sent show cause notices to 10 foreign airlines operating in the country, including Emirates Airline, Oman Air and British Airways, for alleged non-payment of tax amounting to about $120 million (INR100 billion).
The other foreign airlines which have been served with show cause notices are Lufthansa and Singapore Airlines.
The notices, sent over the past three days, deal with unpaid tax dues on the import of services by Indian branches from head offices, The Economic Times (ET) reported, citing unnamed government officials.
The issue covers allegedly unpaid GST (goods and services tax) for the period from July 2017 to March 2024, following an investigation that began in August 2023.
Airlines are not covered by a June 26 circular on the valuation of supply of import of services by a related person, where the recipient is eligible for full input tax credit, the report, citing a senior government official said.
Airlines deal in both exempt and non-exempt services, making them ineligible under the circular, the report said.
DGGI had earlier sought a segregated list of services from foreign airlines.
Overseas headquarters of these foreign airlines were providing services such as aircraft maintenance, as well as payments for crew and rentals, the official was cited as saying.
DGGI said these services are offered from one legal entity to another, and therefore liable for GST, which the airlines have not paid.
A probe was initiated into the matter in August 2023.
