In a significant relief for IndiGo and other Indian airlines, the Delhi High Court has ruled that no additional tax will be imposed on aircraft parts re-imported into the country after repairs abroad. The court struck down a provision in the 2021 customs exemption notification, which required airlines to pay Integrated Goods and Services Tax (IGST) and cess on the repair cost of such goods.
The ruling, delivered on Tuesday, declared this tax imposition unconstitutional, stating that it placed an unnecessary financial burden on aviation companies. IndiGo, India’s largest airline, was one of the petitioners in the case, arguing that taxing re-imported aircraft components after maintenance disrupted cost structures and operational efficiency.
With this decision, airlines can now send aircraft parts for repairs overseas without worrying about additional tax liabilities upon their return. The judgment is expected to ease financial pressures on the aviation industry, which has been grappling with rising operational costs, fuel prices, and maintenance expenses.
The ruling also aligns India’s tax structure with international practices, where repair and re-import processes are generally exempt from additional taxation. Aviation industry stakeholders have welcomed the verdict, viewing it as a positive step toward creating a more business-friendly regulatory environment for airlines operating in the country.
