Delhi High Court Issues Notice On IndiGo's ₹900 Crore IGST Refund Claim Over Quashed Customs Notification

The Delhi High Court on Friday issued notice on budget airline company InterGlobe Aviation's (IndiGo) plea seeking refund of over Rs 900 crore in IGST paid under quashed June 2021 customs notifications that had imposed IGST on re-import of repaired aircraft parts, noting that although the issue is pending before the Supreme Court, there is no stay on the earlier High Court ruling.

A Division Bench of Justice V Kameswar Rao and Justice Vinod Kumar recorded that the Special Leave Petition filed by the Customs Department against the March 2025 judgment is pending consideration. However, in the absence of any stay, the judgment continues to operate.

The refund claim arises from a March 2025 judgment of the Delhi High Court, where a bench of Justice Yashwant Varma and Justice Ravinder Dudeja quashed two June 2021 Customs notifications, which had expressly imposed IGST on goods re-imported into India after repair abroad. The court held that re-import of repaired aircraft parts amounts to an import of services and not goods. It further held that IGST on imported services can be levied only under Section 5(1) of the IGST Act and not through a customs notification.

Following the judgment, IndiGo applied for refund of IGST paid pursuant to the now quashed notifications. The Customs Department rejected the claim, insisting that the airline must first seek reassessment of each individual Bill of Entry. IndiGo challenged this rejection before the High Court.

Appearing for IndiGo, Advocate V LakshmiKumaran argued that IGST collected under notifications already quashed by the court could not be retained. He submitted that GST is a destination-based tax and that levy of both IGST and customs duty on re-imported repaired parts amounted to unconstitutional double taxation. He also relied on the Supreme Court's ITC judgment to contend that reassessment of Bills of Entry was not required in the present case.

Opposing the plea, Senior Standing Counsel Anurag Ojha submitted that re-import of aircraft parts involves a two-part transaction. He argued that customs duty is levied on the goods component, while IGST is levied on the service element embedded in the transaction, making the two levies separate and independent.

The matter is listed for further hearing on April 8, 2026