The Directorate General of Goods and Services Tax Intelligence (DGGI) has issued show-cause notices to ten international airlines, including British Airways, Lufthansa, and Emirates, for allegedly failing to pay Rs 10,000 crore in taxes, according to the Economic Times.
The warnings, which were received during the last three days, are for unpaid taxes on services imported by Indian branches from their headquarters.
Officials informed ET that the airlines were not subject to a June 26 circular on the valuation of the provision of imported services by a related person if the receiver is eligible for a full input tax credit.
Infosys referenced the circular after receiving an integrated GST demand of Rs 32,000 crore.
According to the report, the DGGI determined that airlines were ineligible under the circular since they provided both exempt and non-exempt services.
The EPA had previously requested a separate list of exempt and non-exempt services from the airlines. However, only four of the ten airlines gave the list, with the others failing to explain.
The notifications span the period from July 2017, when GST was implemented, until March 2024. The international carriers were yet to react to ET's inquiries.
The foreign headquarters of these airlines offer services such as aircraft maintenance, staff payments, and rentals. The DGGI has said that certain services provided by one legal entity to another are subject to GST, which the airlines have not paid.
Some international airlines, including Lufthansa, Emirates, and British Airways, failed to disclose data requested by GST officials for an inquiry that began in August. The airlines informed the authorities they did not save such detailed information.
