IndiGo Shares In Focus After Receiving ₹458 Crore GST Penalty Order
InterGlobe Aviation received a significant GST penalty order of ₹458.26 crore from the Delhi South Commissionerate covering FY2018-19 to FY2022-23, with an additional ₹14.59 lakh penalty from Lucknow authorities for FY2021-22. The company has called both orders erroneous and plans to contest them legally, stating no significant impact on operations.
*this image is generated using AI for illustrative purposes only.
Shares of InterGlobe Aviation , which operates IndiGo Airlines, are expected to be in focus following the receipt of a significant tax demand order from the Goods and Services Tax department. The airline has been served with a GST penalty order amounting to ₹458.26 crore by the Additional Commissioner of CGST – Delhi South Commissionerate, marking a major regulatory challenge for India's largest airline.
GST Penalty Details
The tax authorities have issued a comprehensive penalty covering multiple financial years, with the airline facing substantial financial implications from the regulatory action. According to the company's regulatory filing, the order was received on December 29.
| Parameter: | Details |
|---|---|
| Total GST Penalty: | ₹458.26 crore |
| Assessment Period: | FY 2018-19 to FY 2022-23 |
| Legal Provision: | Section 74 of CGST Act, 2017 |
| Order Receipt Date: | December 29 |
| Additional Penalty (Lucknow): | ₹14.59 lakh for FY 2021-22 |
The penalty pertains to GST demand along with interest and penalty on compensation received from foreign suppliers and the denial of Input Tax Credit. The GST department's order covers a five-year assessment period, representing one of the larger tax disputes in the aviation sector.
Company Response and Legal Strategy
InterGlobe Aviation has strongly contested the tax department's decision, describing the order as erroneous and not in accordance with applicable law. The airline has sought legal advice and intends to contest the order through appropriate legal channels, confirming it will pursue all available legal remedies against the order.
The company is already in appeal before the Commissioner (Appeals) in a similar matter for FY 2017-18, indicating an ongoing pattern of tax disputes with authorities. This demonstrates the airline's consistent approach to challenging what it considers legally flawed tax orders.
Additional Tax Matter
In a separate development, IndiGo also received another order from the Office of the Joint Commissioner, Lucknow, related to FY 2021-22. This order includes a penalty of ₹14.59 lakh following the denial of input tax credit and imposition of interest and penalty.
| Parameter: | Details |
|---|---|
| Issuing Authority: | Joint Commissioner, Lucknow |
| Assessment Period: | FY 2021-22 |
| Penalty Amount: | ₹14.59 lakh |
| Nature: | Input tax credit denial |
The company stated that it considers this order to be erroneous and intends to contest it before the relevant authority.
Financial Impact Assessment
Despite the substantial penalty amounts, InterGlobe Aviation has indicated confidence in its legal position. The company clarified that these developments do not have any significant impact on its financial, operational, or other business activities.
The airline's approach of contesting the orders through appropriate legal channels reflects standard industry practice when facing substantial tax demands. The outcome of these proceedings could set important precedents for similar cases in the aviation sector, particularly regarding compensation arrangements with foreign suppliers and input tax credit claims.
20
