IndiGo Slapped with ₹59 Cr GST Penalty amid Operational Disruptions

IndiGo, already grappling with massive flight disruptions across the country, has now been hit with a tax penalty notice of ₹58.75 crore.

The notice was issued on December 11 by the Additional Commissioner of CGST, Delhi South Commissionerate, adding to the airline’s mounting troubles.

The GST demand and penalty pertain to financial year 2020-21 (FY21) and have been raised against InterGlobe Aviation, IndiGo’s parent company.

IndiGo, however, maintains that the order is flawed and says it has strong grounds to challenge it.

Backed by external tax advisors, the airline said it will formally contest the decision and is confident of having it overturned.

Despite the hefty demand, IndiGo has assured that the order will not impact its financial position or day-to-day operations. "There is no significant impact on financials, operations or other activities of the company," the company said in an exchange filing.

IndiGo Crisis Deepens

The penalty comes at a time when IndiGo is already under intense scrutiny for severe operational chaos that has left thousands of passengers stranded over the past week.

The disruption has led to the cancellation of thousands of flights in just a week, with more than 50 cancellations from Bengaluru Airport alone on December 12.

Earlier in the day, the Directorate General of Civil Aviation (DGCA) suspended four Flight Operations Inspectors (FOI), the officials responsible for monitoring airline safety, pilot training, and compliance.

The suspended officers include Joint Director General Sanjay Brahamane, Deputy Director General Amit Gupta, senior FOI Kapil Manglik, and FOI Lokesh Rampal.

The four-member team under DGCA has been tasked with investigating the root causes of IndiGo’s ongoing crisis.

The airline, which commands more than 60% of India’s domestic aviation market, has been struggling to stabilise operations.

The operational meltdown is linked to the new Flight Duty Time Limitation (FDTL) rules that came into effect on November 1. These rules extend rest hours for pilots, restrict night flying duties, and mandate 48 hours of weekly rest.

Notably, Civil Aviation Minister Ram Mohan Naidu, while addressing the issue in Parliament, said that the FDTL norms were rolled out only after consulting all stakeholders.

He warned that no airline, regardless of size, would be allowed to cause inconvenience to passengers. “Strict action will be taken,” he said.