IndiGo Faces ₹458 Crore GST Penalty, Plans to Challenge Order

IndiGo has informed stock exchanges that the GST department has imposed a penalty of more than ₹458 crore on the airline. The order was passed by the Additional Commissioner of CGST, Delhi South Commissionerate.

The penalty relates to an assessment under the Central Goods and Services Tax (CGST) Act, 2017, covering the period from FY 2018-19 to FY 2022-23. The total GST demand, including interest and penalty, stands at ₹458.26 crore.

Company’s Response

InterGlobe Aviation, the parent company of IndiGo, said it strongly disagrees with the order. According to the company, the GST demand relates to compensation received from a foreign supplier and the denial of input tax credit.

The airline believes the order is incorrect and not in line with the law. IndiGo added that its view is supported by opinions from external tax advisors. The company has decided to challenge the order and take appropriate legal steps.

Earlier Similar Case

IndiGo also mentioned that it is already in appeal before the Commissioner (Appeals) in a similar GST matter for FY 2017-18, indicating that such disputes are not new for the airline.

Separate Penalty from Lucknow Office

In a separate case, the Office of the Joint Commissioner in Lucknow has imposed a smaller penalty of ₹14.59 lakh on IndiGo for the period FY 2021-22. This order also relates to the denial of input tax credit.

The company said it believes this order is also incorrect and plans to contest it before the appropriate authority.

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No Impact on Operations

IndiGo clarified that since it plans to challenge both orders, there is no significant impact on its financial position, day-to-day operations, or overall business activities.

Indigo Share Price Movement

InterGlobe Aviation share price (NSE: INDIGO) was trading at ₹5,111 at around 9:24 am IST on January 2, up marginally by ₹0.50 (0.01%) from the previous close. The stock opened at ₹5,119, touched an intraday high of ₹5,130, and slipped to a low of ₹5,100.50. Over the past year, the share has moved between a 52-week high of ₹6,232.50 and a 52-week low of ₹3,945. The company offers a dividend yield of 0.20%, with a quarterly dividend amount of ₹2.56 per share.

Conclusion

IndiGo has received large GST penalty orders from tax authorities but remains confident of its legal position. The airline plans to challenge the rulings and expects no material impact on its financials or operations.

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