GST notices to foreign airlines could hurt India's aviation potential: IATA

Global trade body for airlines on Tuesday decried the show-cause notices issued to 10 foreign airlines in India over alleged non-payment of GST, claiming that it could dampen the country’s strong aviation potential.

The International Air Transport Association (IATA) was referring to notices issued by Directorate General of GST Intelligence (DGGI) to 10 foreign airlines regarding alleged non-payment of tax of about Rs 10,000 crore. 

About 330 airlines, comprising more than 80 per cent of global air traffic, are members of IATA.

The DGGI has sent show cause notices to airlines such as Emirates, Singapore Airlines, Lufthansa, British Airways, Oman Air and five others Xie Xingquan, IATA’s Regional Vice President for North Asia and Asia Pacific (ad interim), said that the airlines’ body is disappointed that the DGGI has proceeded to issue show cause notices, despite a number of representations made by the aviation industry on this matter.

“DGGI’s assertion that GST should apply to expenses incurred by the headquarters of foreign airlines (with a branch office in India) in the course of providing air transport services is flawed. It does not take into consideration the nature and conventions involved in the provision of international air transport,” Xingquan noted.

“Furthermore India is alone in its approach, nowhere else around the world is this practiced. Indian carriers operating to destinations outside India do not face similar situations or demands.” he added.

The international nature of air transport necessitates a clear and consistent policy framework globally, he said, adding that IATA continues to work closely with the Indian government on this matter.

“IATA has also urged the government to urgently help resolve this matter, which can dampen and risk India’s strong aviation potential,” Xingquan stated.

In June, IATA had announced that India will host its annual general meeting (AGM), world’s most premier aviation event, in 2025, after a gap of 42 years. 

The chiefs and various other top executives of almost all global airlines, aircraft manufacturers, and other aviation sector stakeholders gather once a year at IATA’s AGM to discuss issues pertaining to the global aviation sector.

IndiGo, India’s largest airline by market share, will be the host airline of the AGM and the World Air Transport Summit that will take place in Delhi between June 8-10, 2025.