Finance Minister Nirmala Sitharaman led – GST panel Council’s 54th meeting in New Delhi has decided to exempt foreign airline companies from GST on imported services. This move provides relief to about ten foreign carriers which faced tax notices for unpaid dues.
“Another important decision was taken to exempt import of services by an establishment of a foreign airlines company, there were some notices which were also reported in the media earlier from a related person or any of its establishments outside India when made without consideration,” said Revenue Secretary Sanjay Malhotra while explaining the press on key decisions taken in the meet.
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This regularization for the past period is done on ‘as is where is’ basis, which suggests that if a business which received a tax notice has paid the tax, there will be no refund, but if it has not been paid, it will be condoned.
The decision follows a probe initiated in August 2023.
The above decision will provide significant relief to the foreign airlines that were issued show cause notices by the Directorate General of GST Intelligence (DGGI) , with GST demands exceeding INR 10,000 crores.
Later IATA called on the Indian government to resolve the issue quickly while expressing disappointment with the DGGI for issuing these notices despite multiple industry representations.
Calling this assertion as flawed, IATA had previous warned that international carriers might halt their India operations if the issue is not resolved.