IndiGo Airlines’ parent company, Interglobe Aviation, has received a tax demand totalling about ₹1,666 crore from the Commissioner of Income Tax-Appeals, the airline announced in a letter to the stock markets on November 22. Moreover, DGCA has fined Air India with ₹10 lakhs! Here is airline news, which includes income tax owed by IndiGo and fine by Air India.
IndiGo Owes A Total Tax Of Over ₹1,600 Crore
The airline intends to challenge the Commissioner of Income Tax Appeals’ ruling, requesting a recovery of ₹927 crore for the 2017–18 assessment year and ₹740 crore for the 2016–17 assessment year.
The airline claimed that the commissioner did not give it a chance for a private hearing. According to the airline’s statement, the case was not decided on the basis of merit. The CIT-Appeal has now issued the corresponding orders.
It confirms the adjustment to the taxable income due to the tax treatment of certain incentives. That the company received from manufacturers when it purchased the aircraft and engine. As well as the disallowance of certain expenses, without providing a chance for a personal hearing or a merit-based decision-making process.
Since a similar ruling was granted in 2015, this is the second time the Commissioner of Income Tax-Appeals has confirmed a tax claim on IndiGo. A request was made in 2015 to the Central Board of Direct Taxes to take into account the commission that Indian airlines would get from the sale of their aircraft when determining their taxable income.
Based on this opinion, the CIT sent letters to InterGlobe Aviation in 2015, requesting that the Indigo Airlines operator explain why, for the assessment years 2008–11, its taxable income should not have increased by more than ₹400 crore in order to account for the discounts it had obtained.
Also Read: IndiGo Enters Codeshare Agreement With Qantas. What Does It Mean For Flyers?
DGCA Fines Air India With ₹10 Lakhs
Air India has been fined ₹10 lakh by the aviation regulator, the Directorate General of Civil Aviation (DGCA). This was for failing to comply with regulations regarding the amenities and payments. In this, passengers should receive for situations like flight delays, cancellations, and being forced to travel on unserviceable seats,
In the last year and a half, Air India has been the target of similar actions twice. The Tata Group airline was hit with a penalty of ₹10 lakh by the DGCA in June 2022 for breaking rules on boarding denials.
In May and September of 2023, the DGCA inspected scheduled domestic operators’ airports in Delhi, Kochi, and Bangalore. This was to make sure they were fulfilling their responsibilities regarding the amenities. And compensation offered to passengers in accordance with DGCA regulations. It was discovered that Air India was not abiding by the appropriate CAR’s (Civil Aviation Requirements) regulations during the airline inspections, as per the statement.
After the inspections, on November 3, the DGCA sent the airline a show-cause notice. Further, it requested that it respond to the regulator’s findings on non-compliance with the applicable standards. The regulator had stated at the time that it was critical to uphold passenger rights.
Also Read: Air India Express: Modern Look, Bright Colours, Aircraft Livery & More! Here’s All About It
And make sure carriers run under “harmonised conditions” that comply with international best practices.
Cover Image Courtesy: Wikimedia
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First Published: November 23, 2023 1:09 PM