NEW DELHI: Global airlines’ grouping IATA on Tuesday flagged India’s complex tax regime as a challenge and emphasised the need for greater certainty in tax rules to fully harness the rapidly growing India’s aviation market.
“India presents incredible growth opportunities and is expected to outpace China in terms of civil aviation growth,” said Willie Walsh, Director General of the International Air Transport Association (IATA), at a press briefing in the national capital.
His remarks come against the backdrop of some foreign carriers receiving tax notices in India. Walsh said the issue is not new, with taxation having long posed challenges for the airline industry in the country.
“India has a very complex tax system. For the country to truly realise the potential of India’s aviation sector and turn its vision into reality, taxation issues must be addressed,” he said, responding to a question from PTI.
Walsh clarified that the suggestion was not to eliminate taxes altogether but to bring more clarity and consistency in how tax rules are applied. “Often, there’s a reinterpretation of an existing rule, which differs from its earlier understanding. This leads to retroactive tax claims and prolonged litigation, which in many cases eventually resolves in favour of the airlines,” he added.
He stressed that if India is serious about tapping into its massive aviation opportunity, it must offer greater predictability in taxation.
IATA, which represents over 350 airlines globally – including Indian carriers like Air India, IndiGo and SpiceJet – accounts for more than 80 per cent of global air traffic.
High airport charges
The organisation has also repeatedly raised concerns about high airport charges in various parts of the world.
Walsh reiterated IATA’s position, stating that airlines expect efficient and cost-effective airport operations. “We want to see airports making sensible, long-term investments that the industry can afford,” he said.
While acknowledging that differences between airlines and airports over charges will persist, Walsh noted that the two sides agree on the majority of issues.
“There’s probably common ground on 80 per cent of matters, but the remaining 20 per cent—often related to financing – is where disagreements arise,” he said.
According to Walsh, better engagement between airlines and airports is essential. “Many airports, and this is not unique to India, often fail to fully understand the operational needs of airlines. This leads to infrastructure that is either misaligned with airline requirements or more expensive than necessary,” he said.
The IATA Annual General Meeting (AGM), held in New Delhi from June 1 to 3, marked the first time in 42 years that the global aviation industry body convened in India.
