IndiGo slapped with ₹13 lakh GST penalty, airline to contest order — details here

IndiGo has been slapped with a penalty of over ₹13 lakh in connection with Goods and Services Tax (GST) payments. The low-budget carrier reportedly does not agree with the ruling and will contest the order through appropriate legal channels.

The Office of the Assistant Commissioner of State Tax, Excise and Taxation Department, Punjab has imposed the penalty of ₹13,28,255 for the financial year 2021-22, news agency PTI reported.

IndiGo operates the largest domestic network in India and continues to expand its International footprint.

IndiGo to contest ruling

“The department has raised GST demand along with penalty. The company believes that the order passed by the authorities is erroneous,” the airline was quoted as saying by PTI.

Further, the airline, which is the largest in India by market capitalisation, said it believes that it has a strong case on merits, and its position is supported by advice received from external tax experts.

“Accordingly, the company will contest the same before the appropriate authority,” InterGlobe Aviation, the parent of IndiGo, said in a regulatory filing on Thursday.

It also clarified that the penalty will have no major impact on its financial position, operations or other business activities, PTI reported.

IndiGo services stabilise post chaos

The GST notice comes shortly after IndiGo went through a period of widespread disruptions, where hundreds of its flights were either cancelled or delayed due to operational and weather-related challenges.

However, the airline's operations stabilised, as it asserted on Wednesday that it is fully prepared to handle the high travel demand of the upcoming holiday season. The assurance comes after a period of significant operational challenges earlier this month, which left multiple travellers stranded at airports across India.

The carrier has also implemented a 10% reduction in its winter flight schedule, a strategic move made in compliance with a mandate from the Ministry of Civil Aviation intended to stabilise the network after the disruptions.

With weather forecasts pointing to a harsher winter ahead, the airline said it remains firmly committed to maintaining service reliability and will take all necessary measures to minimise potential travel delays for its passengers.