ATA says taxation issues pose hurdles for airlines
AVIATION & AIRPORTS

ATA says taxation issues pose hurdles for airlines

The president of IATA warned that airlines would leave the Indian market if tax-related issues were not resolved in India. Over the past few months, the India offices of numerous multinational aircraft companies have received tax evasion alerts from the Directorate General of GST Intelligence (DGGI). Among other airlines, notice has been sent to British Airways, Lufthansa, and Emirates. Etihad Airways, Qatar Airways, Emirates, Singapore Airlines, Thai Airways, and Airlines of Saudi Arabia.

Wille Walsh, the director general of the International Air Transport Association (IATA), responded to a query from ET, stating that, as a consequence, there might be a withdrawal of these airlines from the Indian market. He explained that this withdrawal typically occurs gradually, with airlines reducing the number of flights due to its impact on profitability, eventually leading to a complete withdrawal. He made these remarks while speaking on the sidelines of the Annual General Meeting of IATA in Dubai. According to Walsh, notices were issued for non-payment of tax on services such as maintenance, crew payments, and aircraft lease rentals, which are provided by the airlines to their Indian entity. IATA, in its communication with the Indian government, argued that these services' place was both the head office and branch office, suggesting that airlines should only be liable to pay taxes on services taxable in India, like payments for hotel accommodation used by Indian staff outside of India.

A senior airline official clarified that when a foreign airline obtains permission to operate in India, the Directorate General of Civil Aviation (DGCA) grants permission to the global headquarters, not the local unit. Therefore, holding the airline liable for services is a legal grey area. The official mentioned that they have requested that the government suspend this.

IATA further stated that airlines' branch offices in India do not engage in crucial operations such as contracting for aircraft leases, crew, pilots, fuel, and maintenance. All operations to and from India are decided, controlled, and operated by airlines' head offices. Thus, attributing strategic and operational risks and functions to the branch offices in India is legally inaccurate, according to IATA.

Walsh expressed optimism about opportunities in the Indian aviation sector but emphasised that the government needs to implement the right policies to unlock the country?s potential. He highlighted the example of the Chinese market, which constitutes 12% of global aviation, indicating the potential for growth in India, contingent upon the government's policy decisions.

The president of IATA warned that airlines would leave the Indian market if tax-related issues were not resolved in India. Over the past few months, the India offices of numerous multinational aircraft companies have received tax evasion alerts from the Directorate General of GST Intelligence (DGGI). Among other airlines, notice has been sent to British Airways, Lufthansa, and Emirates. Etihad Airways, Qatar Airways, Emirates, Singapore Airlines, Thai Airways, and Airlines of Saudi Arabia. Wille Walsh, the director general of the International Air Transport Association (IATA), responded to a query from ET, stating that, as a consequence, there might be a withdrawal of these airlines from the Indian market. He explained that this withdrawal typically occurs gradually, with airlines reducing the number of flights due to its impact on profitability, eventually leading to a complete withdrawal. He made these remarks while speaking on the sidelines of the Annual General Meeting of IATA in Dubai. According to Walsh, notices were issued for non-payment of tax on services such as maintenance, crew payments, and aircraft lease rentals, which are provided by the airlines to their Indian entity. IATA, in its communication with the Indian government, argued that these services' place was both the head office and branch office, suggesting that airlines should only be liable to pay taxes on services taxable in India, like payments for hotel accommodation used by Indian staff outside of India. A senior airline official clarified that when a foreign airline obtains permission to operate in India, the Directorate General of Civil Aviation (DGCA) grants permission to the global headquarters, not the local unit. Therefore, holding the airline liable for services is a legal grey area. The official mentioned that they have requested that the government suspend this. IATA further stated that airlines' branch offices in India do not engage in crucial operations such as contracting for aircraft leases, crew, pilots, fuel, and maintenance. All operations to and from India are decided, controlled, and operated by airlines' head offices. Thus, attributing strategic and operational risks and functions to the branch offices in India is legally inaccurate, according to IATA. Walsh expressed optimism about opportunities in the Indian aviation sector but emphasised that the government needs to implement the right policies to unlock the country?s potential. He highlighted the example of the Chinese market, which constitutes 12% of global aviation, indicating the potential for growth in India, contingent upon the government's policy decisions.

Next Story
Infrastructure Transport

NF Railway Launches Girder on World’s Tallest Pier Bridge in Manipur

The Northeast Frontier Railway (NFR) has reached a significant engineering milestone by successfully completing the girder launch on the iconic Noney Bridge in Manipur.Regarded as an engineering marvel, the Noney Bridge is recognized as the world’s tallest railway pier bridge. It forms a crucial part of the 111 km long Jiribam-Imphal railway line project.Recently, the final span of the bridge was successfully erected, marking the completion of all eight spans of this monumental infrastructure venture.Kapinjal Kishore Sharma, Chief Public Relations Officer of NFR, stated that this accomplishm..

Next Story
Infrastructure Urban

Cube Highways Trust Reports Rs 34.53 Bn Total Income in FY25

Cube Highways Trust (Cube InvIT), managed by Cube Highways Fund Advisors, concluded its second financial year post-listing on a strong note by reporting a total consolidated income of Rs 34.53 billion for the financial year 2025, marking a 12.3 percent year-on-year (YoY) increase.According to the official media release, Cube InvIT posted a consolidated earnings before interest, tax, depreciation, and amortisation (EBITDA) of Rs 2,380 crore, reflecting a 21.7 percent YoY growth. During the year, traffic volumes increased by 6.2 percent, while the Asset Under Management (AUM) grew 25 percent to ..

Next Story
Infrastructure Transport

New Flyover to Ease Traffic on Hyderabad’s Busiest Road

To improve urban connectivity and reduce traffic congestion in the city, the Greater Hyderabad Municipal Corporation (GHMC) will undertake the construction of a two-lane unidirectional flyover at NFCL Junction in Banjara Hills, along with a two-lane unidirectional underpass and a three-lane unidirectional flyover at TV9 Junction, as part of the state government’s prestigious Hyderabad City Innovative and Transformative Infrastructure (H-CITI) programme.The NFCL Junction flyover will be a two-lane unidirectional structure extending from Banjara Hills Road No. 3 towards GVK Mall. It is planned..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?