InterGlobe Aviation Receives Rs 1,666 Crore Tax Demand; Vows Legal Challenge

In a recent development, InterGlobe Aviation, the parent company of India's largest airline, IndiGo, disclosed on Wednesday that it has received a substantial tax demand totalling Rs 1,666 crore from the Commissioner of Income Tax Appeals. The orders, dated November 21, 2023, are linked to a demand of Rs 740 crore for the assessment year 2016-17 and Rs 927 crore for the assessment year 2017-18.

The tax dispute revolves around the treatment of certain incentives that IndiGo received from manufacturers during the acquisition of aircraft and engines, coupled with the disallowance of specific expenses. The Assessing Officer had initially raised a demand of Rs 7,396.76 million for the assessment year 2016-17 and Rs 9,270.31 million for the assessment year 2017-18. In response, IndiGo filed an appeal before the Commissioner of Income Tax Appeals.

IndiGo, in a regulatory filing to the exchange, expressed its dissatisfaction with the recent orders, emphasizing that the Commissioner of Income Tax Appeals confirmed the revision to taxable income without providing an opportunity for a personal hearing or thoroughly adjudicating the matter on merits.

The airline is geared up to challenge these orders, intending to pursue appropriate legal remedies. With guidance from legal experts, IndiGo asserts that the views taken by the tax authority are not sustainable. It's crucial to note that the figures mentioned in the tax demand exclude interest and penalty.

Despite this setback, IndiGo remains steadfast in its commitment to addressing the dispute through legal channels to ensure a fair and justified resolution. The airline aims to uphold its reputation and financial standing by navigating the complexities of the tax dispute diligently.

On the stock market front, shares of InterGlobe Aviation Ltd were trading near the flat line at Rs 2,606.40 per share as of 10:35 am on the NSE. Investors and industry observers will be closely monitoring the unfolding legal proceedings as the airline navigates the intricacies of the tax dispute in pursuit of a favourable outcome.