Supreme Court to hear IndiGo’s IGST dispute with customs department over re-imported aircraft parts
On Monday, the Supreme Court, the Ministry of Customs, who operated the largest airline in India, and Interglobe Aviation Ltd. between, integrated goods and service tax (IGST), after being sent abroad for maintenance after being re -sent to India, the goods sent to India re -sent to the repair costs of a dispute agreed to examine a dispute.
A Justice Bank from Nagarathna and R. Mahadevan issued a notification to Indigo after listening to the defense of the private department.
The case decided in March after challenging a portion of the 2021 customs notification that required the payment of IGST and CESS on such re -imported goods by the Supreme Court of Delhi, after challenging a contrary to the constitution.
Additional lawyer General N. Venkataraman, who appears for the Customs Department, said, “An important constitutional question emerged in this regard. The decision hurts us-declares us in contradiction with the constitution and affects every re-imports.”
However, the lawyers representing Indigo told the court that the airline was still waiting for repayment from the department despite the Supreme Court decision and the authorities refused to comply with the decision. “Our repayments are now stuck. [high] The court’s order, ”they argued.
The queries sent to Indigo by e -mail remained unanswered while publishing this report.
Case history
The March decision of the Supreme Court of Delhi brought great relief to the airlines. He responded to the 2023 petition opened by Interglobe Havacılık, who challenged the re -imported aircraft and parts following the repairs of IGST abroad. Indigo claimed that temporary exports were not goods, but a source of service, as it remained the ownership of aircraft engines and the parts sent for repair. For this reason, to be privileged after the repair should not withdraw additional taxes.
The Supreme Court decided that IGST could be taken only in accordance with the 5 (1) section of the IGST Law, not through customs notifications of IGST on imported services. He announced that the re -import of repaired goods is not the goods but a service import, and therefore could not be taxed in accordance with the Customs Tariff Law.
The government rejected the claim that the 2021 amendments were only explanations, and the court actually expanded the scope of the tax illegally. In January 25, 2023, the court directed Indigo to temporarily pay IGST. After the final decision, the airline had the right to return taxes.
IGST’s evolution in privileged goods
Before GST (before 2017): Within the scope of notification numbered 94/96 (given on 16 December 1996), the customs duties on the goods sent abroad for repair are obtained only without making double taxation in insurance and load.
After GST (since 2017): After the GST was released on July 1, 2017, the government issued a new notification that continued to have previous treatment, IGST and Cess gave only the repair cost, insurance and load, not on the total value of the goods.
However, uncertainties continued to apply IGST to re -imported goods. To address this, the indirect Tax and Customs Central Board (CBIC) reiterated that on July 19, 2021, IGST should only be applied for the repair cost, insurance and load components.
For the first time, the judiciary did not intervene in IGST disputes. In 2022, the Supreme Court stated that the tax mechanism violated the principles of the GST law, and issued a turning point to importers for ocean load services provided by foreign suppliers to foreign suppliers.
On Monday, the Supreme Court, Interglobe Aviation Ltd. Among the integrated goods and service tax (IGST), after being sent abroad for maintenance, the goods restructured to India should be taken over the repair cost of the re -structured contradiction agreed to examine a dispute.
Nagarathna BV Nagarathna and R. Mahadevan released a notification to Indigo after listening to a defense opened by the Customs Department.
Following the difficulty of the Delhi Supreme Court of Delhi, the case reached a March decision that requires the payment of IGST and CESS on such re -imported goods and decreased a part of the 2021 Customs Exemption Declaration, which declared it unlawful.
“An important constitutional question has emerged in this regard. The decision is harming us-declares the yasışı unlawful and affects every re-imports,” he said.
However, the lawyer, representing Indigo, told the court that the airline was still waiting for reimbursement from the department despite the Supreme Court decision, and the authorities refused to comply with the decision.
“Our repayments are now stuck.
The query sent to Indigo by E -Post remained unanswered until the press time.
Background
The March decision of the Supreme Court of Delhi was a great relief for airlines, including Indigo. He decided that IGST and CESS could not be applied to the repair cost of the goods re -imported after maintenance abroad.
The court declared some of the 2021 customs declarations in violation of the Constitution and claimed that such taxes were beyond the scope of law.
The decision came to respond to the 2023 petition opened by Interglobe Aviation, which challenged the IGST tax for aircraft and parts re -imported after repairs abroad. Indigo claimed that the temporary exports were not goods, not goods, as the ownership of the aircraft engines and the parts sent for repair. As a result, their privileged after repair should not attract additional taxation beyond the first import taxes.
The Supreme Court approved the IGST’s discussion that IGST on imported services, not through customs notifications, but that it could be taken only in accordance with the 5 (1) section of the IGST Law. He announced that the re -imported goods have a service imports, not goods, and therefore cannot be taxed in accordance with the Tariff Tariff Law.
The government rejected the claim that the 2021 amendments were only explanations, and the court actually expanded the scope of the tax illegally. In the temporary decision of January 25, 2023, the court directed Indigo to temporarily pay IGST. Following the final decision, the airline had the right to refund the taxes paid.
IGST’s evolution in privileged goods
Pre -GST period (before 2017):
94/96-SUBSTANCE (December 16, 1996) within the scope of the notification, the customs duties on the goods sent abroad for repair are obtained only without repairing the repair cost, insurance and freight, double taxation.
Post -GST Application (from 2017):
After the GST was released on July 1, 2017, the government issued a new notification on previous treatment – Igst and CESS are not only on the cost of repair, insurance and load, not the total value of goods.
However, uncertainties continued to apply IGST to re -imported goods. To address this, the indirect Tax and Customs Central Board (CBIC) reiterated that on July 19, 2021, IGST should only be applied for the repair cost, insurance and load components.
For the first time, the judiciary did not intervene in IGST disagreements. In 2022, the Supreme Court hit the IGST tax for importers for ocean load services provided by foreign transport lines within the scope of CIF (Cost, Insurance and Insurance and Load) contracts, indicating that the tax mechanism has violated the principles of the GST Law.
