Delhi High Court to hear IndiGo's plea for Rs. 900 cr IGST refund

The Delhi High Court today issued notice on a plea by InterGlobe Aviation Ltd (IndiGo) seeking to recover nearly ₹900 crore from the Customs department.

High Court has sought a response from the Customs Department on a plea challenging the levy of customs duty on aircraft engines and parts re-imported into India after overseas repairs and the subsequent denial of refunds amounting to over ₹900 crore.

A Bench of Justices V Kameswar Rao and Vinod Kumar passed the order and listed the case for hearing in April 2026. It has also recorded that the Special Leave Petition filed by the Customs Department against the March 2025 judgment is pending consideration.

Notably, the Delhi High Court in March had declared unconstitutional the imposition of IGST and cess on the repair component of goods re-imported after overseas maintenance. The court had accordingly struck down portions of a 2021 Customs exemption notification that sought to levy tax on the repair value of such re-imports.

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.

IndiGo contended that Customs officials compelled the airline to pay these duties to clear aircraft engines and other critical components. As per the airlines, at the time of re-import, since repairs constitute a service, IndiGo had paid Goods and Services Tax (GST) on a reverse-charge basis. Despite this, it has said the customs authorities treated the same transaction as an import of goods and sought to levy customs duty again.

When IndiGo later filed refund claims, Customs authorities rejected them, stating that the airline must first seek reassessment of each bill of entry. IndiGo has maintained that duty has been paid under protest in all cases and that speaking orders had already been issued on the disputed assessments, against which appeals were pending.

According to IndiGo, this issue had already been settled by the customs tribunal, which had held that customs duty could not be levied again on re-imports following repairs. Although the relevant exemption notification was later amended, the tribunal ruled that the amendment would operate only prospectively. IndiGo further pointed out that the tribunal subsequently held that levying customs duty again on such re-imports was unconstitutional and struck down the relevant portion of the notification.

Last week, the airline’s latest plea had come up before a division bench of Justices Pratibha Singh and Shail Jain. However, the hearing did not proceed as Justice Shail Jain recused herself, informing the court that her son is a pilot with IndiGo.

In a related news, the Delhi High Court on December 17, 2025, refused to entertain a public interest litigation (PIL) seeking “four times” compensation for passengers affected by recent flight cancellations by IndiGo Airlines and a judicial inquiry against the Directorate General of Civil Aviation (DGCA) for alleged regulatory lapses. High Court is also seized of PIL over the large-scale disruption of IndiGo flights seeking directions to the Union government to ensure adequate ground support as well as timely refunds amid the airline’s operational breakdown.

Case Title: Interglobe Aviation Ltd. vs. Deputy Commissioner (Refund), Office of The Principal Commissioner of Customs