SC issues notice to IndiGo on plea by customs department on IGST exemption

The case reached SC after customs department challenged a March ruling by the Delhi HC that struck down a portion of 2021 customs notification requiring payment of IGST on such re-imported goods

The Supreme Court (SC) on Monday sought a response from Indigo on a petiton filed by the customs department on whether the Integrated Goods and Services Tax (IGST) on aircraft components re-imported into India after being sent abroad for maintenance should be levied, according to a report by LiveLaw.

 

A bench comprising Justices B V Nagarathna and R Mahadevan issued a notice to IndiGo after hearing the customs department's plea. The case reached SC after the customs department challenged a March ruling by the Delhi High Court that struck down a portion of a 2021 customs notification requiring payment of IGST and cess on such re-imported goods.

 

 

Along with the Customs Department, Union Government, GST Council and the Central Board of Indirect Taxes and Customs are the other petitioners.

 

“An important constitutional question has arisen in this matter. The judgment hurts us—it declares the law unconstitutional and affects every re-import,” said the Additional Solicitor General N Venkataraman, appearing for the Customs Department.

 

Counsel representing Interglobe Aviation, the parent company of IndiGo, informed SC that the airline is still waiting for the refunds from the department despite the High Court’s order and that officials have refused to comply with the ruling. “Our refunds are all getting stuck now. They are refusing to abide by the Delhi High Court’s order,” they argued.

 

The dispute centers on whether the repair costs of goods re-imported into India after being sent abroad for maintenance should be charged IGST. The outcome of this case could have significant implications for the aviation industry and also for the interpretation of GST laws concerning re-imported goods.

 

The IndiGo IGST dispute

 

In 2021, the Central Board of Indirect Taxes and Customs issued a notification requiring airlines to pay IGST and cess on such re-imports. IndiGo challenged this in the Delhi HC, arguing that the parts had already been taxed during export or repair, and charging IGST again would be double taxation on the components.

 

In March 2024, the Delhi HC ruled in IndiGo’s favour, striking down parts of the notification as unconstitutional and beyond the government’s powers. It invoked Section 25(1) of the Customs Act, 1962, to grant exemptions in the public interest. The Customs Department and GST Council have now approached the SC to challenge this ruling.