New Delhi: India’s largest airline, IndiGo, has been served a Goods and Services Tax penalty amounting to over Rs 458 crore, a decision the company has said it will legally challenge. The airline has maintained that the order is incorrect and will have no material impact on its financial position or day to day operations.
The penalty has been imposed by the Additional Commissioner of the Central GST, Delhi South Commissionerate. It relates to an assessment order issued under Section 74 of the Central Goods and Services Tax Act, 2017, covering the financial years from 2018–19 to 2022–23. The total GST demand, including interest and penalty, stands at Rs 458.26 crore.
According to regulatory disclosures, the tax authorities have raised the demand on compensation received by the airline from a foreign supplier and have also denied certain input tax credits claimed by the company. IndiGo has stated that it strongly disagrees with the findings and believes the order is not in accordance with existing tax laws. The airline has relied on advice from external tax experts in forming its assessment.
IndiGo has confirmed that it will pursue appropriate legal remedies against the order. It has also pointed out that a similar matter related to the 2017–18 financial year is already under appeal before the Commissioner of Appeals. Given its intent to contest the ruling, the airline has said the penalty does not pose any significant risk to its financial health, business continuity or operational activities.
In a separate development, IndiGo has also been penalised Rs 14.59 lakh by the Office of the Joint Commissioner in Lucknow for the 2021–22 period. This order likewise involves the denial of input tax credit along with interest and penalty. The company has reiterated that it believes this ruling is also legally unsound and that it has a strong case on merit.
InterGlobe Aviation, the parent company of IndiGo, has confirmed that it will challenge this order before the appropriate authority. It has emphasised that this penalty too will not have any meaningful impact on the airline’s financials or operations.
Despite the tax disputes, IndiGo has sought to reassure investors and stakeholders that its business remains stable and that it will continue to address regulatory matters through established legal channels.
