India Addresses Tax Notices Served to International Airlines Amid Industry Concerns

Image Source : CNBC TV18

The International Air Transport Association has confirmed that India has taken steps to address the issue of tax notices served to foreign airlines operating in the country. The matter, which raised concerns over the applicability of Goods and Services Tax on expenses incurred by international carriers, had the potential to impact India’s aviation growth.

Key Developments in the Tax Dispute
- The Directorate General of GST Intelligence issued show cause notices to multiple foreign airlines, questioning the taxability of services imported by their Indian branch offices.
- IATA expressed disappointment over the move, stating that India’s approach was inconsistent with global aviation tax conventions.
- The Indian government has now engaged with industry stakeholders to resolve the matter, ensuring compliance while maintaining a favorable business environment.

Industry Response and Potential Impact
- IATA warned that the tax issue could dampen India’s strong aviation potential, urging authorities to adopt a globally aligned policy framework.
- The aviation sector has seen rapid growth, with India emerging as one of the fastest-expanding markets for international air travel.
- Airlines operating in India have welcomed the government’s intervention, hoping for a resolution that supports operational efficiency.

Future Outlook and Policy Adjustments
- The Indian government is expected to refine its tax policies to prevent similar disputes in the future.
- Industry experts anticipate that the resolution will reinforce India’s attractiveness as a hub for international carriers.
- Continued dialogue between regulators and airlines will be crucial in maintaining stability in the aviation sector.

Source: Indian Express, IATA Airlines