IndiGo has launched a legal challenge seeking over ₹900 crore in customs duty refunds, claiming the government’s taxation on aircraft parts returned from overseas repairs is unfair. The airline says it faces double taxation, paying GST on repairs abroad while being charged customs duty again when the same parts are re‑imported into India.
The airline explained that sending parts overseas for repair qualifies as a service, which is taxed under GST. IndiGo paid the tax under the reverse charge mechanism. However, when the repaired parts returned to India, customs authorities treated them as fresh imports, demanding additional duty. The airline argues this approach is unjust, effectively taxing the same transaction twice – first as a service, then as an import of goods.
The case was initially listed before a Delhi High Court bench of Justices Prathiba M Singh and Shail Jain. However, Justice Jain recused herself, citing a conflict of interest, as her son is employed as a pilot with IndiGo. The matter will now be heard by a different bench.
IndiGo stated that it had paid the disputed customs duties “under protest” to avoid delays in returning critical aircraft parts to service. The airline also pointed to previous tribunal and court rulings suggesting that re‑imported parts should not face double levies once GST has been discharged. Customs authorities, however, rejected refund claims, asking the airline to reassess each bill of entry, a process IndiGo says is impractical.
Alongside this case, IndiGo is contesting a GST demand of ₹58.75 crore for the financial year 2020–21. The airline has clarified that these disputes are unlikely to affect operations materially.
This case could have wide implications for the aviation sector and other businesses dealing with imported goods and overseas repairs. The Delhi High Court’s ruling may set an important precedent on how GST and customs duty interact for re‑imported parts, potentially shaping tax practices for years to come.
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