‘No clarity on GST on services imports’

NEW DELHI: As the 54th GST Council has granted exemption to the foreign airlines, various sectors facing tax notices on import of services are urging the government for clarity on the issue.

This exemption, specifically tailored for airline industry, reflects the preferential treatment the industry receives in other countries. However, experts say there is still a lack of clarity regarding the overall taxability of such services, leaving many industries in a state of uncertainty as they navigate the implications of this decision.

The Directorate General of Goods and Services Tax Intelligence (DGGI) had recently sent GST notices to Infosys, foreign shipping companies and foreign airlines for unpaid taxes on import of services by Indian branches from their foreign head offices.

Revenue Secretary Sanjay Malhotra during the presser addressed a media query regarding the confusion surrounding the law on related-party transactions. He referred to a circular dated June 26, 2024, stating that it provides clarity on this issue.

As per the circular, for related-party transactions involving goods and services (excluding exempted items), the valuation can be determined by the parties involved. This matter has already been resolved, as per him.

Source : https://www.newindianexpress.com/business/2024/Sep/11/no-clarity-on-gst-on-services-imports