DGGI’s show cause notices have been sent following detailed action taken against these airlines in 2023, sources said. They added that the tax authority has alleged tax evasion on account of import of services from head office by Indian branch offices.

The tax authority has sent notices to Emirates for tax evasion worth ₹7,550 crore, Etihad Airways for ₹1,660 crore, Saudi Arabia Airlines for ₹612 crore, Air Arabia for ₹455 crore, Oman Airlines for ₹71 crore, Thai Airways for ₹60 crore, Qatar Airways for ₹53 crore, Singapore Airlines for ₹40 crore, British Airways for ₹33 crore, and Lufthansa Air Cargo for ₹10 crore, sources said.

Meanwhile, the International Air Transport Association (IATA) said it is disappointed with the DGGI’s move despite a number of representations made by the industry on this matter.

Dr Xie Xingquan, IATA’s Regional Vice President for North Asia and Asia Pacific, told CNBC-TV18 that DGGI’s assertion that GST should apply to expenses incurred by the headquarters of foreign airlines (with a branch office in India) in the course of providing air transport services is flawed.

“It does not take into consideration the nature and conventions involved in the provision of international air transport. Furthermore, India is alone in its approach, nowhere else around the world is this practiced,” he claimed.

IATA Regional VP added that Indian carriers operating to destinations outside India do not face similar situations or demands. The international nature of air transport necessitates a clear and consistent policy framework globally, he said.

IATA continues to work closely with the Indian government on this subject, he said, adding the international airlines’ association body has also urged the government to urgently help resolve this matter, which can dampen and risk India’s strong aviation potential.