The Ministry of Finance, Department of Revenue, issued a Letter vide F. No. 190341/12/2025-TRU dated January 31, 2025 regarding the exemption of GST on services imported by foreign airlines in India without consideration, as per Gazette notification No. 08/2024 dated 08.10.2024. The exemption is subject to conditions; GST payment on transport services in India, certification from the Ministry of Civil Aviation (MoCA) that the airline is designated under bilateral agreements, and reciprocity ensuring Indian airlines are not taxed similarly abroad. MoCA provided a list of designated foreign airlines operating in India [Annexure I] and comments from Indian carriers on reciprocity [Annexure II]. The letter references an Office Memorandum (O.M.) dated 20.01.2025 and places relevant documents on the CBIC website for field formations.
The undersigned is directed to refer to O.M. dated 20.0, 2025 (copy enclosed) from the Ministry of Civil Aviation (MoCA), which provides information regarding Gazette notification No. 08/2024 – Integrated Tax (Rate) dated October 8, 2024, notified by the Department of Revenue.
It should be noted that based on recommendations from the 54th GST Council meeting held on September 9, 2024, the import of services by an establishment of a foreign airline company from a related party or any of its establishments outside India, when made without consideration, was exempted under the following conditions:
1. GST at the applicable rates must be paid by the establishment of the foreign airline company in India on the transport of goods and passengers, as applicable.
2. The Ministry of Civil Aviation must certify that the establishment of the foreign company in India is that of an airline company which has been designated by the foreign government under the relevant bilateral air services agreement with India.
3. Furthermore, the Ministry of Civil Aviation must certify that, on a reciprocal basis, designated Indian airlines are not subject to similar taxes by whatever name called for the same services under the entry, by the Government of the country designating the foreign airline company.
The second and third conditions mentioned above pertain to MoCA. Regarding the second condition, MoCA has provided a list of designated foreign airlines currently operating from India according to the ongoing Winter 2024-25 schedule (Annexure I of the O.M.).
Regarding the third condition, MoCA has stated that the matter was discussed with Indian carriers operating international services, and comments received from Indian carriers, namely Air India, IndiGo, and Akasa Air, have also been shared (Annexure II to the O.M.).
The O.M. received from MoCA, along with the relevant Annexures, will be posted on the CBIC website for the field formations’ information.
The letter can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2025/02/letter-dated-31012025.pdf
