Relief for Indigo: No additional tax on aircraft parts re-imported following repairs, says Delhi HC
New Delhi: The court declared unconstitutional a part of the 2021 customs department exemption notification that required payment of integrated GST and a cess on the repair cost of goods re-imported into India after being sent abroad for maintenance.
In a major relief for aviation companies, including IndiGo, the Delhi High Court on Tuesday struck down the Integrated Goods and Services Tax (IGST) levy on the repair cost of goods re-imported into India after being sent abroad for maintenance.
The court declared a portion of the 2021 customs exemption notification unconstitutional, ruling that IGST and cess cannot be imposed on the repair cost of such goods.
The verdict came in response to a 2023 petition filed by InterGlobe Aviation, the parent company of IndiGo, challenging the IGST levy on re-imported aircraft and parts post-repair.
IndiGo argued that since aircraft engines and parts sent abroad for repair remain its property, their export for maintenance constitutes a supply of services rather than goods. As a result, the airline contended that re-imported goods should not face additional taxation beyond the original import duties.
A division bench comprising Justices Yashwant Varma and Ravinder Dudeja upheld IndiGo’s argument, ruling that IGST on imported services can only be levied under Section 5 (1) of the IGST Act, not through customs notifications.
