IndiGo faces penalties amounting to Rs 116 crore imposed by GST authorities
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The airline stated that there is no significant effect on its financials, operations, or any other business activities.
The Goods and Services Tax authorities have levied penalties amounting to Rs 115.86 crore on IndiGo, as disclosed in a regulatory filing on Wednesday, InterGlobe Aviation Ltd., the parent company of IndiGo, announced this on Wednesday. The filing indicates that the penalty order was issued on February 4.
Out of the total, Rs 113.02 crore relates to services rendered to offshore clients, which the GST authorities did not classify as “export of services,” resulting in the denial of input tax credit for specific services for the fiscal years 2018, 2019, and 2020. The remaining Rs 2.84 crore penalty is attributed to the denial of input tax credit (ITC) for the same fiscal years, according to the filing.
The total sum comprises penalties imposed by the additional commissioner of the Central Goods and Service Tax in the South Commissionerate of Delhi, along with those from the joint commissioner of GST and Central Excise in Chennai South, as stated in an exchange filing.
The additional commissioner in Delhi has imposed a penalty of Rs 113 crore. The department has applied GST on services rendered to offshore recipients, asserting that these do not qualify as an export of services. Consequently, input tax credit was denied on specific services for the financial year 2017-18.
The company’s filing also indicated that it is currently challenging the orders with the relevant appellate authority.
In the third quarter of the current financial year, the airline experienced a decline in net profit of 18.3%, bringing it down to Rs 2,448.8 crore compared to the same period last year.
In January, the Bureau of Civil Aviation Security (BCAS) imposed a substantial fine of one crore and twenty thousand rupees on IndiGo for breaching aviation security regulations by allowing passengers to remain seated and eat on the apron of Mumbai airport. This penalty is likely the largest ever imposed by an Indian regulatory body on a domestic airline.
