10 Foreign Airlines Operating in India summoned for GST Evasion

The Directorate General of GST Intelligence (DGGI) has summoned 10 Foreign Airlines operating in India over alleged GST Evasion.

The GST intelligence has requested detailed clarification of tax evasion from British Airways, Lufthansa, Singapore Airlines, Etihad Airways, Thai Airways, Saudi Arabia Airlines, Kuwait Airways, Emirates, Qatar Airlines, Oman Airlines, and Air Arabia on the basis of services imported from the head office by Indian branch offices.

The crackdown on GST leakage by multinational airlines operating in India but based elsewhere stems from non-compliance with the reverse charge mechanism for aircraft rentals, maintenance, crew salaries, and other local expenses.

Search Operations in October 2023 conducted by DGGI

Foreign airlines allegedly failed to pay the GST liable for services provided from overseas. The Reserve Bank of India allows international airlines to remit foreign currencies linked to passenger and cargo sales, but other services provided by the head office in India are subject to GST.

In October 2023, the DGGI conducted searches at Indian offices of foreign airlines such as Etihad, Emirates, Saudi Airlines, Qatar Airways, Air Arabia, Oman Air, and Kuwait Airways for alleged tax evasion resulting from the import of services from the head office by Indian branches.