DGGI Slaps Rs 10,000 Crore Tax Notices On 10 Foreign Airlines. Find Out Who Are Involved

The notices, sent over the past three days, address unpaid taxes on the import of services by Indian branches of the foreign airlines from their head offices

The overseas headquarters of 10 foreign airlines provide services such as aircraft maintenance, crew payments, and rentals.

Source : FreePik

The Directorate General of Goods and Services Tax Intelligence (DGGI) has issued show-cause notices to 10 foreign airlines, including British Airways, Lufthansa, and Emirates, for allegedly failing to pay Rs 10,000 crore in taxes, The Economic Times reports. According to the report, the notices, sent over the past three days, address unpaid taxes on the import of services by Indian branches from their head offices.

According to officials, the airlines were not covered under a June 26 circular on the valuation of the supply of import of services by a related person where the recipient is eligible for a full input tax credit. This circular was previously cited by Infosys following an integrated GST demand of Rs 32,000 crore. ABP Live has not independently verified the report.

The DGGI stated that since airlines engage in both exempt and non-exempt services, they were ineligible under the circular. The agency had requested a segregated list of exempt and non-exempt services from the airlines; however, only four of the 10 airlines complied, while the others failed to provide an explanation.

The notices cover the period from July 2017, when GST was introduced, to March 2024. The foreign carriers have yet to respond to queries from The Economic Times.

The overseas headquarters of these airlines provide services such as aircraft maintenance, crew payments, and rentals. According to the DGGI, these services, offered from one legal entity to another, are liable for GST, which the airlines have not paid.

In a related development, Karnataka authorities have revoked the ‘pre-show cause’ notice issued to IT giant Infosys and instructed the company to provide a new response to the DGGI central authority regarding the Rs 32,400 crore GST demand issue.

The DGGI serves as the primary intelligence and investigative agency for issues related to Goods & Services Tax, Central Excise Duty, and Service Tax, ensuring better compliance with Indirect Tax laws.