IndiGo Seeks ₹900 Crore Customs Refund; Moves Delhi HC Over Duty on Re-Imported Aircraft Parts

InterGlobe Aviation Ltd, the operator of IndiGo, has approached the Delhi High Court seeking a refund of over ₹900 crore paid as customs duty on aircraft engines and parts re-imported into India after overseas repairs.

The petition was taken up on Friday by a Division Bench of Justices Prathiba M Singh and Shail Jain. However, Justice Jain recused herself from hearing the matter, stating that her son is a pilot with IndiGo. The case will now be listed before a different Bench as per the Chief Justice’s directions.

Appearing for the airline, Advocate V Lakshmikumaran argued that imposing customs duty on re-imports following repairs amounts to an unconstitutional double levy, since the airline already pays basic customs duty on re-import and separately discharges GST under reverse charge for repair services.

IndiGo claimed the issue had been previously settled by the customs tribunal, which ruled that customs duty cannot be levied twice on re-imported goods after repairs.

Although the relevant exemption notification was later amended, the tribunal held that the amendment was prospective and later struck down the portion of the notification that allowed double taxation.

Despite this, IndiGo alleged that customs authorities continued insisting on duty payments to clear engines and critical components, leaving the airline with no choice but to pay under protest across 4,000+ bills of entry, totalling more than ₹900 crore, to avoid grounding aircraft.

When IndiGo later sought refunds, customs officials refused, arguing that the airline must seek reassessment of each individual bill of entry.

IndiGo countered that all payments were made under protest with speaking orders already passed, and that the department’s reliance on the Supreme Court’s ruling in ITC Ltd. was misplaced as that case dealt with voluntary tax payments—not duty paid under protest.

The airline further submitted that no reassessment orders were passed despite repeated representations, effectively denying IndiGo the benefit of prior judicial rulings that had already declared the levy unconstitutional.

In March 2024, the Delhi High Court, in another case filed by IndiGo, held that re-import of aircraft and parts after repairs constitutes an import of services under GST, not goods. It struck down a notification attempting to impose additional customs levies as ultra vires the IGST Act.

The matter is currently pending before the Supreme Court, even as IndiGo now seeks relief in the form of a refund of the disputed duties.

Also Read: IndiGo Flight Cancellations: Refunds, Compensation Rules and How Passengers Can Claim Their Benefits