Paid Under Protest: IndiGo Moves Delhi High Court Seeking ₹900 Crore Customs Duty Refund on Re-import of Aircraft Parts
Commenting on IndiGo’s petition before the Delhi High Court seeking a refund of over ₹900 crore in customs duty paid on the re-import of aircraft engines and parts, Aditya Bhattachrya highlgihted the larger legal and policy implications for India’s aviation sector.
Aditya noted that the case brings to the fore a long-standing anomaly in the taxation of cross-border aircraft repairs. “IndiGo’s grievance is rooted in double taxation, first, the levy of GST on repair services carried out overseas, and second, the imposition of customs duty when the same repaired components are re-imported into India, despite judicial precedents that characterise such transactions as services rather than fresh imports,” he said.
Highlighting the operational realities faced by airlines, Aditya pointed out that IndiGo was compelled to pay the disputed duty “under protest” across thousands of bills of entry to prevent grounding of aircraft and disruption of flight operations. However, he observed that customs authorities have declined refunds on the ground that each bill of entry would require separate reassessment, raising concerns around administrative efficiency and regulatory certainty.
According to Aditya, the outcome of this litigation could have far-reaching consequences for the aviation industry, particularly in terms of tax predictability, ease of doing business, and alignment of customs practice with established judicial interpretations. He emphasised that a clear and consistent framework is essential to avoid recurring disputes and to support the operational viability of airlines operating in a highly capital-intensive sector.
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