Modi government considering exempting foreign airlines from GST?

In what could be a major relief for foreign airlines operating in India, the Centre is likely to give GST relief, amid growing concerns over ease of doing business, CNBC TV 18 reports, citing ssources.

Mathrubhumi could not independently verify the details of the report. As per the report, the government is considering to introduce changes in the June 2024 circular in the upcoming GST council. 

This is on the backdrop of the Centre’s decision to introduce clarity in the GST norms and ease of doing business. 

This might come as a big relief to the ten foreign airlines operating in India. Earlier this month, the Directorate General of GST Intelligence (DGGI) had sent notices to 10 airlines including British Airways, Lufthansa and Emirates etc for allegedly not paying Rs 10,000 crore in taxes. 

The notices pertained to unpaid taxes on the import of services by Indian branches from their head offices. Apart from the airlines, the DGGI had also sent the notice to Infosys, one of India’s leading IT companies along with certain shipping lines.

Going ahead, airlines across the world are eagerly waiting the outcome of 534th GST council meeting happening on September 9, 2024. The GST council is planning to discuss issues regarding tax slab reduction, rate rationalisation etc along with removal of duty inversion under GST. 

Right after the DGGI slapped a notice to 10 foreign airlines, International Air Transport Association (IATA) sprung into action and warned that ‘these taxes can dampen and risk the country's strong aviation potential.’

The IATA expressed its disappointment over the issue and urged the Indian government to resolve the matter quickly. The IATA further stated that Indian airlines operating outside India do not face such tax inclusions and that India is alone in this approach towards taxes.

Now, with the government mulling about cancellation of the GST taxes, foreign airlines will heave a sigh of relief, but the actual decision is yet to come. Count down to September 9, 2024!