IATA Country Director for India highlighted that 10 foreign airlines are currently under investigation.
The Global airlines’ association, International Air Transport Association (IATA), has expressed significant concerns regarding an ongoing investigation by an Indian agency into certain GST-related charges against foreign airlines. The Directorate General of GST Intelligence (DGGI) has initiated probes targeting some foreign carriers operating in India.
During a recent briefing, Amitabh Khosla, IATA’s Country Director for India, highlighted that 10 foreign airlines are currently under investigation, describing the move as “unprecedented.” The International Air Transport Association has made a comprehensive representation to the Indian government addressing this issue.
Since October 2023, these airlines have received investigation notices. Xie Xingquan, Regional Vice President for North Asia and Asia Pacific (ad interim), also addressed the GST issue at a briefing on the sidelines of IATA’s annual general meeting.
The investigation revolves around the interpretation of local GST laws concerning the alleged import of services from the head offices of foreign airlines to their branch offices in India. These services include aircraft rental, crew and pilot costs, and maintenance expenses. According to the authority, such costs must be cross-charged to the Indian branch, making them liable for GST under the reverse charge mechanism.
IATA argues that the branch offices of these airlines in India do not handle crucial operations such as contracting for aircraft leases, crew and pilots, fuel, and maintenance costs. All operational decisions and controls for flights to and from India are managed by the airlines’ head offices. IATA asserts that it is legally incorrect to attribute any strategic or operational responsibilities to the Indian branch offices.
India is one of the fastest-growing civil aviation markets globally. IATA, representing over 330 airlines and accounting for more than 80% of global air traffic, is closely monitoring the situation.
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