The Indian tax authorities have slapped tax invoices of up to $ 80 million, or ₹ 685 million rupees, in the lease of aircraft by multiple airlines or that 85% are linked to Indigo, according to an industrial note of a global Ishka.
“India is a jurisdiction that taxes on financial leases, and Ishka understands that the tax authority of India surprised the landlords with tax audits that reclassify the doses of operational leases such as financial leases, opening the leases to 10% income to the lease,” according to the lease. “
Although the audit includes leases in multiple airlines, including Air India and some smaller aircraft carriers, approximately 85% of indigo related exposure.
The largest airline in the country has operational lease agreements, including Avolon, Aviation Capital Group (ACG), Aercap, Boc Aviation, Carlyle Aviation Partners and SMBC Aviation Capital. But according to Ishka’s note, it was not clear what lessors were included in tax liabilities.
Recently, Indigo informed the Stock Exchange that he received a fine of ₹ 944.20 million rupees of the Income Tax Department for the Year of Evaluation 2021-22. He said he considered the “erroneous” order and promised to challenge her by legal means.
Ishka’s report quoted an unidentified expert who called the unprecedented income tax department on its scale.
“I am not aware of any challenging jurisdiction that challenges the leases of cross -border airplanes in this way. In my 20 years, I have never seen something like that,” he quotes a family of major European tax partners with the layers of taxes in some OH bones has been jurisdictions produced or challenged individual audits or challenged a small cohort of leases, but never on this scale on this scale. “
In an operational lease, the lease company retains the property and has the risk or rewards of the asset and the lessee uses the asset for a shorter term and returns it at the end. In a financial lease, the lessee assumes most of the risks or rewards of the property and the duration of the lease is usually long term and the lessee can have the option to buy the asset.
Expressing Conerns on behalf of the lease community, the report says that the landlords could face an indirect financial exposition. “If Indigo cannot pay your responsibility, then the Final Tax Law $ 80 million for the financial year 2022-2023 will only resort to the landlords if the appeals are not successful.”
He has warned that development could deter the landlords with doing business with Indian Airlines.
He has also criticized the “changing regulations” that result in uncertainties for landlords who carry out airlines in the country.
Although Ishka is the opinion that Gujarat International Financial Tec (gift), the Special Badge Economic Project of India aimed at attracting foreign investments, could survey possible solutions through the favorable tax treatment other landlords The Hindu He spoke indicated that there was a wide sensation in the industry that he realizes that it was a strong arm tactic to push lease companies to establish a store in Gift City. “This is not a way to motivate anyone,” said a senior industry executive to The Hindu.
Published – April 15, 2025 09:25 PM IST