IndiGo faces Rs 458 crore GST demand, says order is erroneous

InterGlobe Aviation Ltd, the parent of budget carrier IndiGo, on Tuesday disclosed that it has received a tax order from the Additional Commissioner of CGST, Delhi South Commissionerate, raising a goods and services tax (GST) demand of Rs 458.26 crore for multiple financial years.

In a regulatory filing under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, the airline said the assessment order, issued under Section 74 of the Central Goods and Services Tax Act, 2017, covers the period from FY2018-19 to FY2022-23 and includes tax, interest and penalties.

The GST department has imposed the demand over compensation received by the airline from a foreign supplier and the alleged wrongful availment of input tax credit.

IndiGo said it believes the order is “erroneous and not in accordance with law,” citing advice from external tax experts. The airline said it will contest the demand and pursue appropriate legal remedies. It is already pursuing an appeal before the Commissioner (Appeals) in a similar matter relating to FY2017-18.

Separately, IndiGo announced an increase in pilot allowances and the introduction of new benefits, signalling efforts to boost morale following recent operational disruptions that led to mass flight cancellations.

Under the revised structure, layover allowances for captains will be raised to Rs 3,000 from Rs 2,000, while those for first officers will increase to Rs 1,500 from Rs 1,000. Allowances for “deadheading”, when crew travel as passengers to position themselves for future duties—will rise to Rs 4,000 from Rs 3,000 for captains, and to Rs 2,000 from Rs 1,500 for first officers.

The changes, effective January 1, follow meetings between IndiGo’s senior management and pilots across multiple bases in recent weeks.