DGGI cracks down on major foreign airlines in India: Conducts searches at their offices

In a major crackdown, officials from the Directorate General of GST Intelligence (DGGI) have conducted extensive search operations at the Indian offices of several foreign airlines, including Etihad, Emirates, Saudi Airlines, Qatar Airways, Air Arabia, Oman Air, and Kuwait Airways. The searches, conducted on October 18, were part of an investigation into alleged tax evasion concerning the import of services from the airlines' head offices by their Indian branch offices.

DGGI has alleged that these carriers evaded taxes by booking expenditures, such as lease rentals, crew charges, and fuel charges, to their head offices and not charging the same to their Indian branches. According to Goods and Services Tax (GST) regulations, transactions between a foreign airline's head office and its Indian branch office must adhere to specific tax guidelines. Even if there is a supply without consideration within a company's head office and branch office, it is deemed as a supply for tax purposes under the Central Goods and Services Tax (CGST) Act.

The Finance Ministry revealed that the DGGI has uncovered GST evasion amounting to ₹57,000 crore from April 2020 to September 2023, involving over 6,000 fake instances of input tax credit (ITC) claims. This investigation has led to the apprehension of 500 individuals involved in tax evasion schemes.

In the ongoing financial year (2023-24), the DGGI has detected 1,040 fake ITC cases amounting to ₹14,000 crore, leading to the apprehension of 91 fraudsters. The Finance Ministry emphasized the importance of identifying and apprehending the masterminds behind these tax evasion schemes, highlighting the government's efforts to disrupt syndicates nationwide.

To combat GST evasion, the DGGI has employed advanced data analysis tools and its intelligence network to collect information. The government has detected a total of ₹1.36 lakh crore as overall GST evasion, including fake ITC claims, in the fiscal year 2023-24. Additionally, voluntary payments of ₹14,108 crore have been made to address these issues, underscoring the government's commitment to curbing tax fraud and ensuring compliance with GST regulations.

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