SpiceJet has been served a tax demand of ₹124.65 crore by the Goods and Services Tax (GST) Department for allegedly failing to file statutory returns for several months, with the low-cost carrier simultaneously facing proceedings for cancellation of its GST registration. The notices, issued out of New Delhi, mark one of the most serious regulatory escalations against the airline in recent years.

The Tax Demand: Month-by-Month Breakdown

The demand was raised following a provisional assessment under Section 62 of the Central Goods and Services Tax (CGST) Act and the State Goods and Services Tax (SGST) Act, 2017, after SpiceJet allegedly failed to file returns within prescribed timelines. According to officials, the airline had consistently submitted returns beyond due dates and committed repeated irregularities.

The month-wise breakdown of the demand stands as follows: ₹44.44 crore for November, ₹43.79 crore for December, ₹12.19 crore for January, ₹12.10 crore for February, and ₹12.12 crore for March.

GST Registration Cancellation Proceedings

A show-cause notice proposing cancellation of SpiceJet's GST registration was issued on 25 May 2026. As of the date of this report, the airline had yet to complete pending compliance requirements.

'If SpiceJet does not promptly file its pending returns and ensure compliance with its statutory obligations under the GST law, further action will be taken as per the rules,' an official said. Cancellation of GST registration would severely restrict the airline's ability to collect and remit taxes on ticket sales and ancillary services — a potentially crippling operational blow.

SpiceJet's Financial Distress: The Broader Context

This regulatory action comes against the backdrop of deepening financial stress at the carrier. SpiceJet reported a consolidated net loss of ₹621 crore for the quarter ended 30 September 2025, a sharp deterioration from a loss of ₹458 crore in the year-ago quarter. Revenue from operations fell 13 per cent to ₹792 crore from ₹915 crore in the corresponding period of the previous fiscal, according to an exchange filing.

Notably, this is not SpiceJet's first brush with regulatory and financial turbulence. The airline has faced aircraft groundings, lessor disputes, and salary delays over the past two years, raising persistent questions about its operational viability.

Market Reaction

SpiceJet shares settled at ₹12.75 on the Bombay Stock Exchange (BSE) on Friday, down 0.47 per cent. The stock has been trading near multi-year lows, reflecting sustained investor concern over the airline's balance sheet and compliance record.

What Happens Next

GST authorities have made clear that non-compliance will trigger further action under the rules. The airline's response to the show-cause notice — and whether it files its pending returns — will determine if the registration cancellation proceeds. Industry observers note that a GST deregistration, even temporary, would compound SpiceJet's already fraught relationship with vendors, lessors, and passengers.