Why is IndiGo contesting a ₹13 lakh Goods and Services Tax penalty?

December 26, 2025 at 03:23 PM•2 min read

IndiGo has been issued a ₹13.28 lakh Goods and Services Tax (GST) penalty by the Punjab tax authority for FY 2021-22, which the airline will contest, calling the order "erroneous."

Key Points

1IndiGo received a ₹13,28,255 Goods and Services Tax (GST) penalty from the Punjab tax department.
2The penalty relates to a GST demand for the financial year 2021-22, according to the regulatory filing.
3InterGlobe Aviation, IndiGo's parent, will contest the ruling, stating the order is "erroneous" and has no major financial impact.
4The tax notice follows a recent 10% reduction in IndiGo's winter flight schedule, mandated by the Ministry of Civil Aviation after operational disruptions.

India’s largest low-budget carrier IndiGo is facing a new regulatory challenge. The airline was recently issued a penalty of just over ₹13 lakh. This fine relates to a Goods and Services Tax (GST) payment dispute. The airline's parent company, InterGlobe Aviation, plans to contest the ruling.

Regulatory Action Details

The penalty amounts to ₹13,28,255. This tax demand was imposed by authorities in Punjab. Specifically, the order came from the Office of the Assistant Commissioner of State Tax, Excise and Taxation Department. The penalty is connected to a GST demand for the financial year 2021-22.

InterGlobe Aviation, in a regulatory filing, stated the order is “erroneous”. The company believes it has a strong case on merits. This position is supported by advice from external tax experts. The low-budget carrier India will contest the tax demand order before the appropriate authority. The airline also clarified the fine will not significantly impact its financial position or operations. This is a common statement in airline regulatory filing updates.

Broader Operational Landscape

This GST notice follows a period of significant operational issues for the airline. IndiGo faced widespread flight cancellations and delays earlier this month. These disruptions were due to weather and operational challenges. The issues included crew shortages following new flight-duty-time norms.

In response, the carrier implemented a 10% reduction in its winter flight schedule. This strategic move complied with a mandate from the Ministry of Civil Aviation. The mandate aimed to stabilize the network after the disruptions. The Directorate General of Civil Aviation (DGCA) is the primary aviation watchdog in India. The DGCA has been closely monitoring the airline's performance.

Despite these challenges, IndiGo asserts its operations have stabilized. The airline is now fully prepared for the high travel demand of the upcoming holiday season. The carrier remains committed to service reliability. It will take measures to minimize potential travel delays.

Context of Tax Challenges

While the ₹13 lakh penalty is relatively small, it highlights ongoing tax scrutiny. IndiGo has recently received other, much larger GST-related demands. For instance, the airline was hit with a ₹58.75 crore GST penalty earlier in December. It also received a ₹117.52 crore GST demand linked to input tax credit claims. Like the current tax demand order, InterGlobe Aviation is contesting these larger penalties as well.

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