India’s Goods and Services Tax (GST) authorities have imposed a substantial penalty of INR 115.86 crore on InterGlobe Aviation Pvt Ltd, the parent company of IndiGo. The fine includes INR 113.02 crore levied by the Additional Commissioner of Central Goods & Services Tax (Delhi South Commissionerate) and an additional INR 2.84 crore imposed by the Joint Commissioner of GST & Central Excise (Chennai South, Tamil Nadu).
According to the tax authorities, the penalty stems from the classification of services provided to offshore recipients, which the department has ruled do not qualify as exports. As a result, these services are subject to GST. Furthermore, InterGlobe Aviation has been denied input tax credit (ITC) on specific services for the financial year 2017-18, and discrepancies have been identified in ITC claims for the financial years 2017-18 through 2019-20.
Despite the ruling, InterGlobe Aviation has challenged the tax department’s decision before the appellate authorities. The airline maintains that the penalties will not have a material impact on its financial standing, operations, or business activities.
Meanwhile, IndiGo reported an 18% year-on-year decline in its consolidated net profit for the December quarter, standing at INR 2,449 crore compared to INR 2,998 crore in the same period last year. The airline, however, remains confident in its financial resilience and continues to engage with tax authorities to resolve the dispute.
