IndiGo to Contest Rs 1.27 Crore GST Penalty Imposed on Input Tax Credit

Low-cost carrier IndiGo has been slapped with a penalty of slightly over ₹1.27 crore in connection with alleged irregularities in claiming Goods and Services Tax (GST) input tax credit. The development was disclosed by the airline in a regulatory filing on Friday. The order pertains to an earlier tax period and is now set to be legally contested. The company maintained that it disagrees with the findings. It has initiated steps to challenge the demand.

In its filing, parent firm InterGlobe Aviation said the demand, including interest and penalty, was issued by the Office of the Joint Commissioner of State Tax (Appeals) IV in Bandra, Mumbai. The tax authority denied certain input tax credits claimed by the airline. The matter relates to the period between July 2017 and March 2018. Officials communicated the order recently. The company disclosed the development in compliance with stock exchange norms.

InterGlobe Aviation asserted that the order passed by the authorities is erroneous and not sustainable on merits. The airline said its position is backed by advice from external tax experts. It added that it has strong legal grounds to contest the demand. Accordingly, the company plans to approach the appropriate appellate authority. The matter will now move through the prescribed legal process.

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The airline also clarified that the financial impact of the penalty is not expected to be significant. It reassured investors that operations and balance sheet strength remain unaffected. Such tax disputes are not uncommon in the aviation and corporate sectors. Many companies have faced scrutiny over GST input tax credit claims since the tax regime was introduced. IndiGo indicated it will pursue all available remedies.

Input tax credit has remained a key compliance area following the rollout of GST in 2017. Authorities have intensified audits to ensure proper credit claims across industries. Aviation companies, given their complex tax structures, often face detailed scrutiny. IndiGo’s challenge to the order suggests the issue may take time to resolve. Further developments will depend on the outcome of appellate proceedings.

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