IndiGo fined ₹1.30 crore related to input tax credit in Gujarat; evaluates legal recourse

IndiGo said on Friday, February 28, that it is facing a penalty of ₹1.30 crore for input tax credit in Gujarat and is evaluating necessary legal recourse. The Assistant Commissioner of State Tax, Ahmedabad, has imposed a penalty of ₹1,30,40,966 on the airline. In a regulatory filing to the stock exchanges, IndiGo said the tax officer denied the input tax credit for FY 2020-21.

"The company believes that it has accurately availed input tax credit and has merits in its case. Accordingly, the company is evaluating necessary legal recourse under the applicable law, including the filing of appeal before the appropriate appellate authority," said InterGlobe Aviation, the parent company of IndiGo Airlines, in a regulatory filing to the stock exchanges today.

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IndiGo faces second penalty in a week

The filing also stated that there would be no significant impact on the aviation company's financials, operations, or other activities. On Wednesday, IndiGo said it is facing a fine of nearly ₹14 lakh for input tax credit in Uttar Pradesh and is evaluating necessary legal recourse. The airline said the tax officer had denied the input tax credit availed for FY21 to raise the demand.

"The company believes that it has accurately availed input tax credit and has merits in its case. Accordingly, the company is evaluating necessary legal recourse under the applicable law, including filing of appeal before the appropriate appellate authority," it said. Further, the carrier said there is no significant impact on its financials, operations or other activities.

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Meanwhile, IndiGo also announced that it will start direct flights from Mumbai to Seychelles on March 22. In a separate release on Friday, the airline said it would operate four weekly flights between Mumbai and Seychelles, an archipelago off the coast of East Africa. The flights will be operated on Tuesdays, Thursdays, Saturdays, and Sundays. 

With more than 400 planes, IndiGo operates 2,200 daily flights connecting more than 120 domestic and international destinations. Shares of InterGlobe Aviation settled 0.86 per cent higher at ₹4,480.30 apiece on the BSE. India's largest domestic airline in terms of market share, commands a market capitalisation of ₹1,73,129.26 crore.

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