More Stories

Informist, Monday, Oct. 6, 2025

 

--SC notice to IndiGo parent on plea for Integrated GST on aircraft reimport 

--CONTEXT:HC had nixed IGST on aircraft reimport after repairs outside India 

--CONTEXT:Customs dept moves SC against HC order on IGST on planes' reimport 

 

NEW DELHI – The Supreme Court on Monday issued a notice to InterGlobe Aviation Ltd., parent of the country's largest airline IndiGo, on a plea by the customs department against the Delhi High Court's March order to quash a part of the government's 2021 notification that sought to impose Integrated Goods and Services Tax on reimport of aircraft or aircraft parts into India after their repair outside the country. The apex court will hear the customs department's plea next on Nov. 21.

 

"Notification No. 36/2021 insofar as it purports to levy an additional levy over and above the IGST imposed under Section 5(1) (of IGST) by adding the words '...tax and cess' is declared unconstitutional, ultra vires the IGST and is quashed to the aforesaid extent," the high court had said in May. On the clarification by the Central Board of Indirect Taxes and Customs through a circular on Jul. 19, 2021, the high court had said that the addition of the words "tax" and "cess" over and above the duty of customs which was originally conceived and provisioned in 2017 notification was "clearly ultra vires" and liable to be declared as an intent to levy an "impost" which is without authority of law. "Circular No. 16/2021(July 2021 circular) issued by the CBIC is consequentially quashed," the court added.

 

The case has its genesis in InterGlobe Aviation moving aircraft engines and aircraft parts for repair and service outside India. InterGlobe Aviation had said that the amount paid by it for the repairs overseas had been taxed as import of services and, therefore, the very same goods being reimported to India couldn't be subjected to IGST on import of goods. The airline had said that both the levies were mutually exclusive.

 

Since the export of the subject goods for repair outside India and their subsequent reimport would fall in the category of "supply of service", no further tax as envisaged under Section 3(7) of the Customs Tariff Act, 1975 would stand, said InterGlobe Aviation. Once a transaction is conferred the character of a supply of service, it would be impermissible for tax authorities to bring those transactions to tax by treating them as an import of goods and articles, it said. 

 

The customs authorities argued that Section 3(7) of the Customs Tariff Act was an independent charging provision levying an additional duty of customs. According to the department, that levy does not stand effaced consequent to the promulgation of IGST. "...notwithstanding the levy of a tax under the principal provision of Section 5(1) of the IGST, the petitioner(airline) does not stand absolved of the liabilities created by Section 3(7) of the Customs Tariff Act," the department said.

 

At 1302 IST, shares of InterGlobe Aviation Ltd. were down 0.1% at INR 5,650.00 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.