Tribune press service
New Delhi, September 11
The central government has issued an order notifying the transfer of fixed assets from Air India Ltd to Air India Assets Holding Ltd (AIAHL) as part of its plan to sell 100 stakes in the national carrier.
In another order, the government also exempted the national carrier from the tax provisions levied at source under the Income Tax Act (IT) on the sale of goods, including shares to AIAHL, the vehicle special purpose (SPV).
In the orders, the Central Commission for Direct Taxes (CBDT) clarified that AIAHL will not be considered a “buyer” in the event of a transfer of goods by Air India under the plan and that Air India will not be considered as a “buyer”. ‘Seller’ when the goods are transferred by him to the SPV.
In its ordinance, the CBDT stated: “In exercising the powers conferred under the Information Technology Act, the central government hereby notifies the transfer of fixed assets under an approved plan. from Air India Limited (PAN AACCN6194P), as a ceding public sector company, to Air India Assets Holding Limited (PAN: AAQCA4703M), being a transferee public sector company, for the purposes of said clause. “
He added: “This notification will come into effect from April 1, 2022 and will apply, accordingly, to tax year 2022-23 and subsequent tax years.”
Before the sale of the shares, the government put in place a plan to make Air India attractive to potential buyers and whereby Air India’s fixed assets are going to be transferred to AIAHL, which was set up to hold half of the loans. of the airline, four of its subsidiaries and secondary assets.
The withholding tax exemption was made to make the sale of Air India more attractive to investors. The national carrier is currently undergoing a strategic divestment, with the government selling its entire stake and management control to the buyer. Financial offers for the same are expected by September 15.
In accordance with the provisions for the collection of withholding tax introduced last year, a seller with a turnover of more than 10 crore rupees in the previous year is required to collect the tax of 0, 1% on the sale of goods to any person for a total value greater than Rs. 50 lakh in the current fiscal year.