The Centre is considering providing GST relief to Infosys, foreign shipping lines, and foreign airlines, as per a CNBC-TV18 report on August 22. It is contemplating introducing changes on the June circular in the upcoming GST council meeting scheduled for September 9.
The government perceives the need for clarity in GST and aims to improve the ease of doing business, particularly in the service sector. Additionally, DGGI has reportedly issued notices to India’s second largest IT company and several foreign airlines.
On August 6, the Directorate General of Goods and Services Tax Intelligence (DGGI) issued show-cause notices to 10 foreign airlines including British Airways, Lufthansa, and Emirates, for allegedly not paying Rs 10,000 crore in taxes, according to an Economic Times report. These notices relate to unpaid taxes on the import of services by Indian branches from their head offices.
The 54th Meeting of GST Council is likely to address matters such as reducing tax slabs, rate rationalisation, and removing duty inversion under GST.
Following the June 23 meeting, Union Finance Minister Nirmala Sitharaman mentioned that a Group of Ministers (GoM) on rate rationalisation, led by Bihar Deputy Chief Minister Sumant Chaudhary, would provide a presentation on the panel’s progress and pending work in the next GST Council meeting.
There have been discussions about easing the ‘related party transaction’ clause under GST for foreign companies in India. Moneycontrol previously reported on the government’s plans to potentially exempt foreign airlines and shipping lines from paying GST at the time of service import, allowing them to pay at the time of service disbursal.
Meanwhile, a Bloomberg report highlighted the Centre’s new efforts to resolve tax disputes with major companies, with a China angle. Analysts have expressed concerns that abrupt tax demands may hinder India’s efforts to attract investment away from China and perpetuate the perception of the country as a challenging place to do business.