IndiGo makes BIG move amid crisis, moves Delhi HC to seek Rs 900 crore refund for…, says its ‘unconstitutional’ to…
According to IndiGo, the exemption notification was later amended but the tribunal ruled that the amendment would apply only prospectively.
IndiGo crisis: IndiGo, India(BHARAT)’s largest domestic airline carrier, which has hogged headlines for the past few weeks due to a staff shortage crisis that resulted in cancellations of thousands of its flights, has now moved the Delhi High Court to seek a refund of more than Rs 900 crore paid as Customs duty on aircraft engines and parts re-imported into India(BHARAT) after overseas repairs.
Why IndiGo is seeking refund of Customs duty?
InterGlobe Aviation, the parent company of IndiGo airlines, filed in the top court on Friday, contending that the levy of Customs duty on such re-imports was unconstitutional and amounted to double levy on the same transaction.
IndiGo’s counsel submitted that at the time of re-import of aircraft engines and parts after repairs, it paid basic Customs duty without any dispute, and since the repair constitutes a service, it also discharged Goods and Services Tax (GST) on a reverse charge basis.
However, IndiGo said Customs authorities insisted on levying Customs duty again by treating the same transaction as import of goods, and asserted that the issue was settled earlier by the Customs tribunal, which held that Customs duty could not be levied again on re-imports following repairs.
Customs declined IndiGo’s refund claims
According to IndiGo, the exemption notification was later amended but the tribunal ruled that the amendment would apply only prospectively.
The airline said it paid the duty under protest for more than 4,000 bills of entry, amounting to more than Rs 900 crore, and when it later filed refund claims, the Customs authorities refused them on the ground that the airline must first seek reassessment of each bill of entry.
IndiGo’s plea came up before a bench of Justices Prathiba M Singh and Shail Jain, but Justice Jain recused herself from hearing the matter since her son is a pilot with IndiGo.
The matter will now be heard by another bench subject to the orders of the chief justice.
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