IndiGo has approached the Delhi High Court to claim a refund of over ₹900 crore paid as customs duty on aircraft engines and parts sent abroad for repairs and then re‑imported into India. The airline says the duty charged by customs authorities amounts to double taxation, as it already paid Goods and Services Tax (GST) on the repair services.
The airline explained that sending parts abroad for repair counts as a service, and GST was paid under the reverse charge mechanism. However, when the repaired parts returned to India, customs authorities treated them as new imports, demanding additional customs duty. IndiGo argues this unfairly taxes the same transaction twice – first as a service under GST and then as an import of goods.
The case was scheduled before a Delhi High Court bench of Justices Prathiba M Singh and Shail Jain, but Justice Jain recused herself due to a conflict of interest, as her son works as a pilot with IndiGo. The case will now be heard by a different bench.
IndiGo said it had no choice but to pay the disputed customs duty “under protest” across thousands of bills to avoid delays in getting critical aircraft parts back into service. The airline referred to previous rulings by tribunals and courts, which have generally held that re‑imported parts should not face double taxation if GST has already been paid. Customs authorities had rejected the refund claims, asking the airline to reassess each entry, which IndiGo considers unreasonable.
In addition to this customs duty issue, IndiGo is also facing a GST demand of ₹58.75 crore for the financial year 2020–21, which the airline plans to contest. It stressed that this will not significantly affect its operations.
The case is important for the aviation industry and tax authorities, as it may clarify how GST and customs duties should apply to goods that are repaired abroad and re‑imported. The Delhi High Court’s decision could set a precedent for airlines and other businesses dealing with similar import and taxation issues.
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