Offices of Saudi Airlines, Qatar Airways, Air Arabia, Oman Air and Kuwait Airways were searched, a CNBC-TV18 report said on October 18. Moneycontrol could not independently verify the information.
“The search operation started on October 18 at Delhi NCR offices of these airlines,” the report quoted a source as saying.
The search operation comes on the back of Goods and Services Tax (GST) notices that were sent to the online gaming and casino industry that have brought back the ghost of the controversial Vodafone retrospective tax case, the CNBC-TV18 report said.
For GST purposes, the Indian entity and its head office are treated as separate bodies for legal reasons, which means transactions between the two come under the purview of the tax regime.
Schedule 1 of the Central Goods and Services Tax (CGST) Act says that 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.
“Airlines were booking expenditure such as lease rental, crew charges, fuel charges, etc, to their head office and were not charging the same to the Indian office,” the report quoted sources as saying.