IATA Chief warns foreign airlines may quit India over taxation issues
AVIATION & AIRPORTS

IATA Chief warns foreign airlines may quit India over taxation issues

The chief of IATA issued a warning, expressing that if India does not address concerns regarding taxation, airlines might withdraw from the Indian market. In recent months, the India offices of several global airline groups have received tax evasion notices from the Directorate General of GST Intelligence (DGGI).

The airlines served notices include Emirates, British Airways, Lufthansa Singapore Airlines, Etihad Airways, Thai Airways, Qatar Airways, Saudi Arabia Airlines, and Emirates. Wille Walsh, the director general of IATA, explained that the potential withdrawal could occur gradually as airlines reduce the number of flights due to profitability concerns.

He mentioned this during the Annual General Meeting of IATA in Dubai. IATA, which has 300 airlines as members, highlighted that the notices were related to non-payment of taxes on services such as maintenance, crew payment, and aircraft lease rentals provided by airlines to their Indian entities.

In its representation to the Indian government, IATA argued that the place of service was both the head office and branch office, suggesting airlines should only pay taxes on services taxable in India, like payment for hotel accommodation used by Indian staff outside of India.

A senior airline official explained that when a foreign airline receives permission to operate in India, the Directorate General of Civil Aviation (DGCA) grants permission to the global headquarters, not the local unit. Thus, holding the local unit liable for services is a legal gray area. IATA has petitioned the government to suspend this issue.

Additionally, IATA 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. Therefore, it is not legally accurate to attribute strategic and operational risks and functions to branch offices in India.

The chief of IATA issued a warning, expressing that if India does not address concerns regarding taxation, airlines might withdraw from the Indian market. In recent months, the India offices of several global airline groups have received tax evasion notices from the Directorate General of GST Intelligence (DGGI). The airlines served notices include Emirates, British Airways, Lufthansa Singapore Airlines, Etihad Airways, Thai Airways, Qatar Airways, Saudi Arabia Airlines, and Emirates. Wille Walsh, the director general of IATA, explained that the potential withdrawal could occur gradually as airlines reduce the number of flights due to profitability concerns. He mentioned this during the Annual General Meeting of IATA in Dubai. IATA, which has 300 airlines as members, highlighted that the notices were related to non-payment of taxes on services such as maintenance, crew payment, and aircraft lease rentals provided by airlines to their Indian entities. In its representation to the Indian government, IATA argued that the place of service was both the head office and branch office, suggesting airlines should only pay taxes on services taxable in India, like payment for hotel accommodation used by Indian staff outside of India. A senior airline official explained that when a foreign airline receives permission to operate in India, the Directorate General of Civil Aviation (DGCA) grants permission to the global headquarters, not the local unit. Thus, holding the local unit liable for services is a legal gray area. IATA has petitioned the government to suspend this issue. Additionally, IATA 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. Therefore, it is not legally accurate to attribute strategic and operational risks and functions to branch offices in India.

Next Story
Technology

We’re building robots that flow, not just move

Founded in 2021, Flo Mobility is reimagining construction automation with vision-AI robots designed for seamless movement through complex sites. In conversation with CW, Manesh Jain, Founder & CEO, discusses the company’s origin, its LiDAR-free tech stack, and expansion plans in the Middle East and US.What inspired the name Flo Mobility? Why ‘Flo’ and not ‘Flow’?When we started the company in 2021, our focus was on building autonomous navigation systems for robots. Since our work centred around robot movement, ‘mobility’ naturally became part of the name. We wanted to co..

Next Story
Real Estate

We’re committed to setting benchmarks in sustainable luxury living

From a landmark land acquisition in Boisar to ambitious launches across the Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru and Pune, Birla Estates is driving future-ready growth with a strong focus on sustainability, partnerships and premium living, firmly anchored in its LifeDesigned® philosophy. K T Jithendran, Managing Director & CEO, outlines the company’s premium, sustainable growth playbook in conversation with PRATAP PADODE, Editor-in-Chief, CW. Excerpts:Birla Estates recently acquired a 70.92-acre land parcel in Boisar, Maharashtra, for..

Next Story
Infrastructure Urban

Mumbai’s land crunch and ageing homes call for structured renewal

Founded in 2022, Etonhurst Capital Partners is a real-estate fund management platform focused on the Indian market. As the firm achieves the first close of Rs 1.8 billion for its debut Rs 5 billion fund, Bamasish Paul, Co-founder, Managing Partner & CEO, discusses its sharp focus on redevelopment-driven value creation in Mumbai’s urban core with CW. Excerpts:Etonhurst Capital has achieved a significant milestone with the first close of Rs 1.8 billion for its Rs 5 billion fund. What factors contributed to this early success and how do you plan to attract further investments to r..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?