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 not paying Rs 10,000 crore in taxes, The Economic Times has reported.
The notices, sent over the past three days, pertain to unpaid taxes on the import of services by Indian branches from their head offices.
Officials told ET that 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.
The circular was cited by Infosys following an integrated GST demand of Rs 32,000 crore.
Moneycontrol couldn’t verify the report independently.
The DGGI said that since airlines engage in both exempt and non-exempt services, they were ineligible under the circular, the report said.
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The agency had earlier sought a segregated list of exempt and non-exempt services from the airlines. However, only four of the 10 airlines provided the list, while the others failed to explain.
The notices cover the period from July 2017, when GST was introduced, to March 2024. The foreign carriers were yet to respond to ET’s queries.
The overseas headquarters of these airlines provide services such as aircraft maintenance, crew payments, and rentals. These services, offered from one legal entity to another, are liable for GST, which has not been paid by the airlines, the DGGI has said.
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Moneycontrol reported on July 9 that several foreign airlines, including Lufthansa, Emirates and British Airways, declined to provide data sought by the GST authorities for an investigation, which began in August. The airlines told the authorities they didn’t maintain such granular data.
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