8 Aug 2024
The Directorate General of Goods and Services Tax Intelligence (DGGI) issued notices regarding services imported by their Indian head offices from their headquarters.
Ten international airlines, including Lufthansa, Emirates, Singapore Airlines, Oman Air, and British Airways, operating in India received show-cause notices from DGGI demanding an explanation on the unpaid GST worth ₹10,000 crores for services imported from their headquarters.
International Air Transport Association (IATA), the global trade body governing the movement of airlines worldwide, disagreed with DGGI’s claim that all airline headquarters must pay GST on the expenses incurred for rendering services like crew, rentals, and aircraft maintenance. It highlighted that Indian carriers flying abroad do not face such taxes.
The notice covers the period from July 2017, when GST was introduced, to March 2024. The Central Board of Indirect Taxes and Customs (CBIC), issued a circular on June 26th, 2024, clarifying the applicability of GST on services provided by international airlines. It makes GST applicable on services imported by Indian carriers from head offices under the reverse charge mechanism.