Tax Tussle Over Aircraft Parts: Supreme Court issues Notice to IndiGo on Centre's plea Against IGST Exemption [Read Judgement]
The bench struck down the levy of Integrated Goods and Services Tax (IGST) on aircraft parts re-imported after being sent abroad for repairs, providing significant relief to airlines.
![Tax Tussle Over Aircraft Parts: Supreme Court issues Notice to IndiGo on Centres plea Against IGST Exemption [Read Judgement]](https://images.taxscan.in/h-upload/2025/10/09/2095020-indigo-taxscan.webp "Tax Tussle Over Aircraft Parts: Supreme Court issues Notice to IndiGo on Centres plea Against IGST Exemption [Read Judgement]")
The Supreme Court issued notice to IndiGo's parent company, InterGlobe Aviation, on a petition filed by the Customs Department challenging a Delhi High Court ruling that exempted the airline from paying Integrated Goods and Services Tax (IGST) on imported aircraft parts that were repaired and serviced abroad.A two judge bench comprising Justice BV Nagarathna and Justice R Mahadevan issued...
The Supreme Court issued notice to IndiGo's parent company, InterGlobe Aviation, on a petition filed by the Customs Department challenging a Delhi High Court ruling that exempted the airline from paying Integrated Goods and Services Tax (IGST) on imported aircraft parts that were repaired and serviced abroad.
A two judge bench comprising Justice BV Nagarathna and Justice R Mahadevan issued notice to InterGlobe Aviation while hearing the customs department's plea against the March 2024 judgment of the Delhi High Court judgement.
The Delhi High Court held that levying IGST on the re-import of aircraft parts that had been sent abroad for repair was unconstitutional. It concluded that this amounted to "double taxation" since the repair service had already been taxed. The court also set aside a 2021 notification from the Central Board of Indirect Taxes & Customs (CBIC) that had imposed the IGST and cess.
The bench struck down the levy of Integrated Goods and Services Tax (IGST) on aircraft parts re-imported after being sent abroad for repairs, providing significant relief to airlines. The court ruled that imposing IGST on the repair cost, insurance, and freight of such re-imported parts was unjustified and amounted to double taxation.
The Court referenced the Supreme Court's ruling in the Mohit Minerals case, which explained that once tax has been levied on a transaction, the same cannot be taxed again under a different head. The Court observed that the amendments introduced through Notification No. 36/2021 and the CBIC clarification were clearly designed to expand the tax net, rather than being merely clarificatory.
The Court clarified that the original notification was unambiguous in restricting the levy to Basic Customs Duty (BCD), and the 2021 amendment sought to drastically alter this position.
The court thus held that levying an additional duty on a transaction already taxed as a supply of service was unconstitutional and could not be sustained.
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