GMR, the Bangalore-based infrastructure company, is being subjected to tax audits by the revenue authorities of Male, Maldives, where it is operating the international airport, according to a report by Haaveru Online, a local website.
The portal quoted the commissioner general of taxation saying that they were checking the airport for possible discrepancies in service charge and oil re-export royalty.
Andrew Harrison, chief executive officer of GMR Male International Airport, told Business Standard they'd made payments of both the airport service charge and the royalty and received confirmation.
"We have not been notified about an audit. But if they want to audit, they are free to come and look," he said. "We will comply with numbers in a tranparent manner and if they are different, we will have to see how they are different. There are some categories where service charged is not applied, like for diplomats or children under two years of age."
The airport service charge is collected by the company on behalf of the government, while a royalty on fuel re-export is calculated at two per cent of freight on board.
The Maldives inland revenue authority is known to be working on the documents after the income to the tax department received was less than expected.
In a new law which came into effect last year, the Maldives began different service charges for local residents and a different charge for foreigners.
The news website claims the amount of tax received did not match the numbers revealed by the tourism ministry even as it could not ascertain the number of local travellers from Maldives who used the airport.
The tax authority is looking through the database of the immigration department for these numbers.
Male international airport is operated by GMR along with Malaysia Airports Holdings Berhad as its partner. The contract was won by the consortium in June last year and has a concession period of 25 years.
In addition to operation and maintenance, GMR would upgrade the airport and add a new terminal. Male is one of the fastest growing airports in the region and has a current traffic of around 2.6 million passengers per year.
The first stage of the project will include increasing capacity to handle five million passengers.
The total cost of expansion is estimated at $511 million (Rs 2,268 crore) and GMR already raised $358 million (Rs 1,589 crore) of debt from the Singapore branch of Axis Bank, the sole underwriter and mandated lead arranger.