Did IndiGo Receive a Penalty of Rs 117.52 Crore for Input Tax Credit Denial?
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Synopsis
InterGlobe Aviation, the parent firm of IndiGo airlines, is facing a hefty penalty of Rs 117.52 crore due to a denial of input tax credit. The company is determined to contest this order, believing it to be incorrect. Despite this setback, they assert that their financial standing remains stable. What does this mean for the airline's future?
Key Takeaways
- IndiGo airlines is facing a penalty of Rs 117.52 crore.
- The penalty is related to input tax credit denial.
- IndiGo believes the order is erroneous and plans to contest it.
- The penalty is not expected to impact the company's financial performance.
- IndiGo recently announced new routes and frequencies from NMIA.
New Delhi, Dec 2 (NationPress) InterGlobe Aviation, the parent company of IndiGo airlines, announced on Tuesday that it has been issued a penalty order amounting to approximately Rs 117.52 crore by the Joint Commissioner of Central Tax and Central Excise, CGST Kochi Commissionerate.
The penalty, which totals Rs 1,17,52,86,402, pertains to the denial of input tax credit for the financial years 2018–19 and 2021–22, as reported in an exchange filing by the airline.
The filing stated, "The department has rejected the input tax credit (ITC) claimed by the company and has issued a demand order accompanied by a penalty."
Furthermore, the company asserts that the order is flawed and believes it has a robust case supported by guidance from external tax advisors. Consequently, they intend to dispute the matter before the appropriate authority.
InterGlobe Aviation emphasized that this order will not significantly affect its financial performance, operations, or activities. "There is no significant impact on financials, operations, or other activities of the Company," the regulatory filing confirmed.
Shares of InterGlobe Aviation fell by Rs 95 or 1.64 percent during intra-day trading, opening nearly flat at Rs 5,794.50 each.
On November 29, the airline announced the addition of new direct routes and increased frequencies from Navi Mumbai International Airport (NMIA), enhancing connectivity from the newly opened gateway to crucial domestic locations like Coimbatore, Chennai, Vadodara, and North Goa.
This week, IndiGo successfully completed mandatory Airbus system updates across its A320-family fleet, following disruptions in global flight operations due to a software issue in the Airbus A320 series.
All 200 aircraft have been fully updated and are now compliant with the necessary requirements, according to the Indian carrier.
Earlier today, an IndiGo flight from Kuwait to Hyderabad was rerouted to Mumbai after a bomb threat was reported to authorities at Hyderabad Airport.
Official sources confirmed that flight 6E-1234 was diverted midair following a threat message received at the customer support center of Rajiv Gandhi International Airport (RGIA) at 05:12 a.m.
Point of View
It's essential to present a balanced view on InterGlobe Aviation's recent penalty. While the financial implications of the Rs 117.52 crore penalty are notable, the company's assertion of contesting the order and their confidence in their case indicates a proactive approach. The overall market reaction shows a slight dip in share prices, yet the airline maintains that its operational integrity remains intact. This situation deserves attention as it unfolds, given its potential ramifications on the aviation industry.
NationPress
02/12/2025
Frequently Asked Questions
What is the reason for IndiGo's penalty?
IndiGo received a penalty due to the denial of input tax credit for the financial years 2018–19 and 2021–22.
How much is the penalty amount?
The penalty amount is approximately Rs 117.52 crore.
What is IndiGo's response to the penalty?
IndiGo believes the order is erroneous and plans to contest it before the appropriate authority.
Will this penalty impact IndiGo's financials?
IndiGo has stated that the penalty will not significantly impact its financials, operations, or other activities.
What recent developments has IndiGo announced?
IndiGo has announced new direct routes and increased frequencies from Navi Mumbai International Airport.
