Various foreign airlines, along with Lufthansa, Emirates and British Airways, have refused to furnish the information asked via the Indian Goods and Services Tax (GST) authorities related to ongoing investigations, as per the sources.
The director general (DGGI) of GST had asked for information related to a probe into the valuation of services given via the foreign airline to their Indian arms. However, the airlines have learned to have told the council that they do not uphold such granular data.
As per the GST council, late last year sent notices before the 10 most prominent foreign airlines over the alleged underpayment of taxes. The cases are related to the practices allegedly followed by these airlines to book expenses related to India from their overseas headquarters. Expenses on the DGGI radar contain costs for leasing aircraft, providing supplies, and maintaining crew members.
According to the Indian authorities, these costs are within the scope of GST in India. Foreign airlines argue that it is common in the aviation industry for the headquarters to book these expenses and provide the same services to local airlines.
It was told by the airlines that the data asked via the DGGI is not carried through them and does not furnish the information. They indeed claimed that these services are not charged with taxes globally and therefore they must be provided relief in India.
No reply has been provided to the email that has been sent before Emirates and British Airways. Lufthansa spokesperson mentioned that we are cooperating with the council and we wish that there shall be a workable solution for the industry.
As per the airlines it has initiated tapping the diplomatic channels through making the representations via their embassies to solve such due notices. They have arrived at the industry bodies along with the International Air Transport Association (IATA).
IATA Director-General Wille Walsh states concerns on the problems of tax that have been faced by the airlines in India. As per him, the airlines were related and directed to some of the foreign carriers to exit India. Issues of tightened tax regulations are been quoted by him extent of taxes and the risks of double taxation as major risks for foreign airlines in India.
Via their embassies, the airlines have incurred representations and the case is being investigated via the related ministry.
Apart from foreign airlines, DGGI is indeed finding the international shipping companies for the same breach. GST norms mention that any services furnished within a company to separate entities are levied to tax.
