In a move which could facilitate strategic disinvestment of Air India, the Centre has given tax exemption on transfer of assets by the national carrier to the special purpose vehicle (SPV) Air India Assets Holding Limited.
The Central Board of Direct Taxes (CBDT) in a notification said that there won’t be any tax deductible at source (TDS) cut in case of transfer of goods by the national carrier to the SPV. It further added that no TDS would be deducted in case of transfer of immovable property by Air India to the SPV.
The notification further said that Air India will not be considered as “seller” for the purpose of TCS deduction related to transfer of goods to Air India Assets Holding Limited.
As part of initiating the process of Air India sale, the government had set up the SPV in 2019 for transfer of debt and non-core assets of the Air India group.
The CBDT notification informed that any transfer of capital assets under the plan approved by the government from the national carrier to the SPV will not be regarded as transfer for the purpose of income tax.
The government is seeking to sell 100 per cent of its stake in Air India, which also includes the national carrier’s 100 per cent shareholding in Air India Express Limited and 50 per cent in Air India SATS Airport Services Private Limited.
The strategic sale has reached the crucial phase with the September 15 being the last date for putting in financial bids by potential buyers.
The government wants to complete the long pending Air India strategic sale this fiscal.