IndiGo, India’s leading airline, has been hit with a hefty tax penalty of ₹944.2 crore for the assessment year 2021-22, imposed by the Income Tax Department.
Despite this significant penalty, IndiGo, under its parent company InterGlobe Aviation, has denied the charges, calling the order “wrong and baseless.”
Details of the Tax Penalty
The fine stems from a dispute regarding input tax credit (ITC) claims, where discrepancies in IndiGo’s financial records between 2018 to 2020 led to a rejection of the ITC.
The airline also faces an additional penalty of ₹2.84 crore by the Joint Commissioner of Chennai.
IndiGo’s Response
In response to the penalty, IndiGo released an official statement, asserting that it has filed an appeal with the Commissioner of Income Tax (Appeals) (CIT(A)).
IndiGo stated that the Income Tax Department mistakenly believed that the appeal had been dismissed, which resulted in the imposition of the penalty.
The airline further emphasized that it views the penalty as “not legally correct” and plans to challenge it further.
Despite the significant penalty, IndiGo reassured its stakeholders that the fine would not have a major impact on its financial performance, operations, or any business activities.
Background of Previous Tax Disputes
This is not the first time IndiGo has faced a tax-related penalty. The airline has encountered several tax disputes in the past:
February 5, 2025: IndiGo revealed that it had received GST demand orders totaling ₹116 crore from tax authorities in Delhi and Chennai.
The tax was primarily linked to the declaration of taxable export services abroad.
January 15, 2025: IndiGo faced a fine of more than ₹25 lakh by the Customs Department related to jet fuel duty and the imposition of additional duty on leftover Aviation Turbine Fuel (ATF).
January 6, 2025: IndiGo was fined ₹2.17 crore by the Customs Department (Air Cargo Complex – Import) for denying duty exemption on the import of aircraft parts.
Despite these recurring challenges, IndiGo maintains that these penalties do not significantly affect its financial or operational status.
Market Reaction
On March 28, 2025, IndiGo’s share price closed at ₹5,100.00, marking a 0.54% decline.
The market has largely responded cautiously, but IndiGo’s official stance is that the fine will not disrupt its business.
