Foreign airlines operating in India should not be liable to pay goods and services tax (GST) on services provided by their headquarters to local offices in India, International Air Transport Association ( IATA) said on Tuesday.
The Directorate General of GST Intelligence had issued summons to foreign airlines for alleged tax evasion for import of services by airlines in India.
While investigations are underway, IATA has opposed the government move and said the costs incurred by airline head offices should not be liable to GST. IATA is an airlines body representing 330 carriers globally.
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These cover costs related to operations such as aircraft rental costs, crew and pilot costs in relation to passengers embarking from India.
“Airlines’ branch offices in India do not play any role in crucial operations such as contracting for aircraft leases, crew, pilots, fuel and maintenance. All the operations to and from India are decided, controlled and operated by airlines’ head offices and it is not legally accurate to attribute any strategic and operational risks and functions to the branch offices in India,” IATA said on Tuesday.
(The writer was in Dubai at the invitation of IATA).