The Goods and Services Tax (GST) Council, during its 54th meeting in New Delhi, have taken a decision to exempt the import of services by foreign airline companies. 

Sanjay Malhotra, Revenue Secretary, said, “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.”

This move will offer substantial relief to foreign airlines that had previously been issued show-cause notices by the Directorate General of Goods and Services Tax Intelligence (DGGI). 

Earlier, DGGI had issued show cause notice to 10 foreign airlines that were operating in India, for alleged non-payment of tax amounting to Rs 10,000 crore. 

The airlines, including British Airways, Lufthansa, Oman Air, Emirates, and Singapore Airlines, received show-cause notices for unpaid tax dues on services imported by their Indian branches from head offices. The tax dues covered the period from July 2017, when GST was implemented, to March 2024. 

The issue stems from the airlines dealing in both exempt and non-exempt services, making them ineligible for relief under a June 26 circular that applies to recipients eligible for full input tax credit.

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