Financial Turbulence For IndiGo As Government Slaps Rs 58.75 Crore GST Penalty

While the airline has not disclosed the details behind the penalty, the notice is part of broader scrutiny of financial compliance in the aviation sector.

The timing, however, is significant, it comes at a moment when the airline is already struggling to stabilise operations.

Source : PTI

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India’s largest airline is facing turbulence on multiple fronts, from financial penalties to mass flight disruptions, as regulators intensify scrutiny of IndiGo’s operations. 

The latest setback arrived on December 11, when the carrier received a tax penalty notice amounting to Rs 58.75 crore from the Additional Commissioner of CGST, Delhi South Commissionerate, for the financial year 2020–21, reported Business Standard.

What Triggered the Tax Penalty?

IndiGo revealed on Friday that it has been served a demand-cum-penalty notice under the central GST provisions. While the airline has not disclosed the details behind the penalty, the notice is part of broader scrutiny of financial compliance in the aviation sector.

The timing, however, is significant, it comes at a moment when the airline is already struggling to stabilise operations.

Regulator Steps In: Four Safety Officials Suspended

Earlier in the day, the Directorate General of Civil Aviation (DGCA) took the unusual step of suspending four senior Flight Operations Inspectors (FOIs). These officials are responsible for overseeing airline safety, pilot training standards, and operational compliance.

The suspended panel includes Joint Director General Sanjay Brahamane, Deputy Director General Amit Gupta, Flight Operations Inspector Kapil Manglik, and FOI Lokesh Rampal.

The DGCA has mandated the committee to identify the root causes of IndiGo’s widespread operational disruptions.

How IndiGo’s Crisis Escalated

IndiGo controls more than 60 per cent of India’s domestic aviation market, making any disruption significantly impactful.

In the past 10 days alone, the airline has cancelled over 1,000 flights, and caused delays nationwide. At Bengaluru Airport on Friday, more than 50 flights were cancelled, adding to the travel chaos.

The airline’s operational meltdown is linked directly to the revised Flight Duty Time Limitation (FDTL) rules, implemented on November 1. These rules extend mandatory rest hours for pilots, restrict night duties, and enforce 48 hours of weekly rest.

The industry had been transitioning toward the new framework, but IndiGo appears to have been disproportionately affected, with roster shortages and scheduling mismatches causing cascading delays.

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