InterGlobe Aviation, the operator of IndiGo, has approached the Delhi high court seeking a refund of over Rs 900 crore it claims to have paid as Customs duty on aircraft engines and parts re-imported into India after overseas repairs.
The petition came up for hearing on Friday before a bench of Justices Prathiba M Singh and Shail Jain.
During the hearing, Justice Jain recused herself from the matter, citing that her son is employed as a pilot with IndiGo.
The case will now be listed before another bench, as per the Chief Justice’s directions.
Appearing for the airline, advocate V Lakshmikumaran argued that imposing Customs duty on re-imports following repairs amounts to a double levy and was therefore unconstitutional.
He submitted that IndiGo had already paid basic Customs duty at the time of re-import without contest, in addition to goods and services tax (GST) on a reverse charge basis, since repairs qualify as a service.
Despite this, Customs authorities allegedly demanded another round of duty by treating the re-imported items as fresh imports, he said.
The airline pointed out that the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) had previously clarified that duty cannot be charged again on repaired re-imports, and while the relevant exemption notification was later amended, the tribunal held that the amendment applied prospectively.
VIndiGo also argued that the high court, in an earlier ruling, had already declared such double taxation unconstitutional. However, the airline claimed it was compelled to pay the duty under protest to avoid delays in clearing aircraft engines and critical parts, which could have grounded flights.
The airline said it paid the amount across more than 4,000 bills of entry, totalling over Rs 900 crore, and subsequently filed refund claims.
The Customs department, it alleged, rejected the claims, insisting that reassessment of each bill of entry must precede any refund.
A Bill of Entry (BOE) is a legal document filed by an importer with the i country’s Customs authority like at an airport, declaring details (nature, quantity, value, origin) of arriving goods for clearance, duty assessment, and tax payment, ensuring legal import compliance and enabling input tax credit.
IndiGo countered that since all payments were made under protest and speaking orders had been issued and appealed against, fresh reassessment was unnecessary.
It further argued that the department’s reliance on the Supreme Court’s ITC Ltd judgment was misplaced, as that decision dealt with voluntary payments later claimed as refunds and not payments made under protest following a court ruling.
VThe airline said it had made multiple representations, including to the Principal Commissioner, but the authorities failed to act.
It maintained that demanding reassessment even after a declaration of unconstitutionality effectively nullifies the benefit of the high court’s judgment.
The Delhi high court had, in March this year, struck down the additional tax imposed on the repair cost of goods re-imported into India after being sent abroad for maintenance on another plea of Indigo.
The court declared as unconstitutional a part of the 2021 Customs department exemption notification that required payment of Integrated Goods and Services Tax (IGST) and cess on the repair cost of such goods.
IndiGo had challenged the notification and the IGST levy on re-imported aircraft and parts following repairs.
IndiGo’s Friday petition rests on the argument that it has suffered double taxation on the same overseas repair transaction.
Explaining the company’s position, Alay Razvi, managing partner at Accord Juris, said the airline has already paid GST under the reverse charge mechanism by treating repairs carried out abroad as imports of services.
VHowever, Customs authorities have treated the re-import of repaired engines and parts as fresh imports of goods and levied additional Customs duty and IGST on the repair value.
“This effectively taxes the same transaction twice-- once under GST and again under Customs law -- contrary to settled judicial precedent,” Razvi noted.
He added that IndiGo paid over Rs 900 crore under protest to prevent aircraft grounding, and the department’s insistence on reassessing thousands of bills of entry despite prior rulings “turns a pure question of law into an unworkable procedural hurdle and undermines constitutional protections against arbitrary taxation.”
Commenting on the broader legal context, Prerna Robin, advocate, Delhi high court, observed that the March 2025 Delhi high court ruling striking down additional IGST and cess on re-imports remains in force, as there is no stay from the Supreme Court.
“The high court has categorically held that re-imports after overseas repairs are imports of services already taxed under GST, and any additional Customs levy on the repair value exceeds the authority of the law,” she explained.
A favourable outcome for IndiGo, she added, could have “far-reaching effects across sectors such as aviation, oil and gas, and heavy engineering,” reinforcing the constitutional limit that delegated legislation cannot expand tax liability beyond what Parliament permits, and bringing long-awaited clarity to maintenance and repair operations.
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