TBM Staff - Mumbai The Central Board of Indirect Taxes and Customs (CBIC) has notified that foreign airline companies in India would be exempt from paying GST (Goods and Services Tax) on services imported from their offshore branches.
The circular follows a recommendation made by GST Council on September 9.
It recommended to exempt import of services by an establishment of a foreign airlines company from a related person or any of its establishments outside India, when made without consideration. The council also recommended to regularise the past period on ‘as is where is’ basis.
Now the notification has set October 10 for implementation of this change. It will be applicable provided that GST at applicable rates is paid by the establishment of the foreign airline company in India on transport of goods and passengers as may be applicable. Also, a certificate from the Civil Aviation Ministry will be required which will state that the establishment of the foreign company in India is that of an airline company which has been designated by the foreign government under the applicable bilateral air services agreement with India.
Also, the certificate needs to mention that on a reciprocal basis, designated Indian airlines are not subject to levy of similar taxes by whatever name called for the same services appearing under the entry, by the Government of the country designating the foreign airline company.
The issue became contentious as early this year DGGI (Director General of GST Investigation) had issued show-cause notices to 10 major foreign airlines with a demand of INR 10,000 crore. Now, all these demands will be regularised. (Source: The Hindu)
