IndiGo faces ₹458 crore GST notice from government over tax disputes
New Delhi :In a major development for India’s largest airline, IndiGo, the Central government has issued a shock ₹458 crore GST (Goods and Services Tax) notice.
The airline disclosed this on Tuesday, stating that the tax authorities had imposed a hefty fine under the GST laws, to which the company has expressed its intention to challenge the order.
The notice was issued by the Additional Commissioner of the CGST (Central Goods and Services Tax) office in South Delhi, covering the assessment period from the financial year 2018-19 to 2022-23. The total GST penalty amounts to ₹458,26,16,980.
The GST department has levied a tax demand on interest and penalties related to compensation received from foreign suppliers, while also denying input tax credit (ITC). IndiGo, however, strongly believes the order is incorrect and not in line with legal provisions, citing support from external tax consultants.
Company to challenge the GST order
In its official statement, IndiGo said, “The company firmly believes that the order issued by the GST department is wrong and inconsistent with the law, supported by advice from external tax advisors.”
IndiGo clarified that it plans to challenge the order through appropriate legal remedies and has already filed an appeal against similar matters in the past, specifically concerning the financial year 2017-18.
The airline further reassured that challenging the notice would not have any significant impact on its financials, operations, or other business activities. “The company believes that the order will not materially impact its business, and the appeal process is expected to resolve the matter,” the statement added.
Additional fine for 2021-22 period
In a separate case, the Joint Commissioner of Lucknow has also imposed a ₹14,59,527 penalty on IndiGo for the financial year 2021-22. The tax authorities had denied the company input tax credit (ITC) and imposed interest and penalties on the demand.
IndiGo, in its filing, reiterated its belief that the order was incorrect and said it was supported by external tax advisory counsel on the legitimacy of its claims.
The airline’s parent company, InterGlobe Aviation, maintains that they will challenge these notices with the appropriate authorities. Despite the legal challenges, IndiGo asserts that the matters would not adversely affect its day-to-day operations or financial standing.
Background on the dispute
This penalty notice comes after a string of recent incidents, including a public outcry over IndiGo’s operational delays last month, when passengers were made to wait for prolonged periods at airports. The airline has faced criticism for its handling of passenger services, and this new GST dispute adds to the company’s mounting challenges.
IndiGo has maintained that it is committed to complying with tax regulations and ensuring that all its operations align with the legal requirements. However, it is clear that this latest tax issue could be another point of contention as the airline navigates through legal and regulatory hurdles in the coming months.
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