India is considering exempting services provided between the head offices and local branches of foreign airline operators from the goods and services tax (GST). Foreign airlines with offices in India have been issued GST notifications for not paying taxes on services imported by Indian entities from their headquarters. The issue has been brought before the fitment committee within the GST Council, and there is a growing inclination towards granting tax exemption. A definitive decision will be made following the committee’s examination. Last year, notices were sent to 12 foreign airlines regarding the imposition of GST on services imported by Indian branch offices. The headquarters of airlines cover expenses such as maintenance, crew payments, and rental costs, and tax authorities claim these services are subject to taxation in India. Foreign airlines have informed the government that they should only be responsible for taxes applicable within India. Similarly, certain shipping companies have also been served with comparable notices.
Source A2ztaxcorp
