Indigo’s Parent Company Will Contest Tax Claims Totaling Rs 1,666 Crore

According to InterGlobe Aviation, based on legal advice from counsel, the opinions of authorities are not sustainable.

InterGlobe Aviation, the parent company of India’s largest airline, IndiGo, announced on Wednesday that it will contest tax charges of Rs 1,666 crore.

The Commissioner of Income Tax-Appeals (CIT-Appeal) has issued tax demand orders for the fiscal years 2016-17 and 2017-18.

In a regulatory statement, the business stated that a demand of “INR 7,396.76 million (AY 2016-17) and INR 9,270.31 million (AY 2017-18) was raised by the Assessing officer, against which the Company had preferred appeal before CIT-Appeal”.

The amounts do not include interest or penalties.

The orders have been issued by the CIT-Appeal.

According to the filing, the revision to taxable income due to the tax treatment of certain incentives received by the company from manufacturers in connection with the acquisition of the aircraft and engine, as well as the disallowance of certain expenses, has been confirmed without providing an opportunity for a personal hearing and adjudicating the matter on merits.

According to the corporation, it will challenge the claim and take proper legal action.

Furthermore, InterGlobe Aviation stated that it thinks, based on legal advice from lawyers, that the authority’s positions are untenable.

The airline is preparing to dispute these directives and will seek appropriate legal remedies. IndiGo contends, with the assistance of legal experts, that the tax authority’s positions are untenable. It is critical to remember that the values in the tax demand do not include interest or penalties. Despite this setback, IndiGo is committed to resolving the matter through legal means in order to secure a fair and reasonable outcome.

 The airline intends to maintain its image and financial status by carefully handling the nuances of the tax battle. As of 10:35 a.m. on the NSE, shares of InterGlobe Aviation Ltd were trading near the flat line at Rs 2,606.40 per share. Investors and industry watchers will be interested.

IndiGo expressed its displeasure with the recent orders in a regulatory filing to the exchange, 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 orders, dated November 21, 2023, are connected to a demand of Rs 740 crore for the fiscal year 2016-17 and Rs 927 crore for the fiscal year 2017-18.