DGGI searches India offices of Qatar Airways, Etihad, Emirates Other Foreign Airlines

GST Intelligence teams are said to have searched foreign carriers’ India headquarters for alleged tax avoidance due to the import of services from head offices by Indian branch offices.

As per media reports, DGGI officials has conducted search operations at Etihad, Emirates, Saudi Airlines, Qatar Airways, Air Arabia, Oman Air, and Kuwait Airways.

DGGI claimed that, “tax evasion by these carriers is due to import of services from head office by Indian branch offices.”

Sources cited in the report, “Airlines were booking expenditure such as lease rental, crew charges, fuel charges, etc., to their head office and were not charging the same to the Indian office.”

“The search operation began on October 18 at these airlines’ Delhi NCR offices,” a source told.

Under to the provisions and clauses of the Goods and Services Tax (GST), the establishment of a corporation in India and its equivalent outside the nation are treated as separate legal entities. This means that transactions between the head office of a foreign airline and its Indian branch office must comply with GST requirements.

“The import of services is subject to reverse charge tax when there is an actual receipt of import service, and in many circumstances, the expenses are filed either at the head office or at the branch, or vice versa, for administrative convenience.” a media person said.

A statement issued by the Finance Ministry on Wednesday, the DGGI discovered Rs 57,000 crore in GST evasion from April 2020 to September 2023, involving over 6,000 fake input tax credit (ITC) claims that resulted in the arrest of 500 people.

It added that in the current financial year (2023-24), 1,040 bogus ITC cases of Rs 14,000 crore were found, with 91 fraudsters detained.

“Since June 2023, DGGI has laid special emphasis to identify and apprehend the masterminds and disrupting syndicates, operating across the country,” according to the statement.

It went on to say that the DGGI launched a special campaign against the practise of claiming fake ITC in order to plug a revenue leakage in the government beginning in 2020.

Cases have been solved utilising data analysis and innovative technology methods, resulting in the arrest of tax evaders.

“These tax syndicates often use gullible persons and enticed them with job/commission/bank loan etc. to extract their KYC [know your customer] documents which were then used for creation of fake/shell firms/ companies without their knowledge and consent,” according to the report.