InterGlobe Aviation shares slump close to 2% in morning trade after central GST body slaps tax penalty on denied input tax credit, news of Kuwait-Hyderabad flight bomb threat
IndiGo owner InterGlobe Aviation Limited on Tuesday announced that the Joint Commissioner of Central Tax and Central Excise, CGST Kochi Commissionerate, Kerala, slapped a GST notice amounting to around Rs 118 crore on December 1.
On the same day, a Kuwait-Hyderabad IndiGo flight made an emergency landing in Mumbai morning following a bomb threat, according to reports.
In the morning trading window, IndiGo was swiftly punished in the National Stock Exchange, with the stock hitting a Rs 5,685 low, down by around 2 per cent from Monday's close.
In a regulatory filing, the IndiGo parent said that the CGST department denied input tax credit (ITC) availed by the company and issued a demand order along with a penalty to the tune of Rs 117,52,86,402 covering the fiscal years 2018-19 to 2021-22.
"The Company believes that the order passed by the authorities is erroneous," InterGlobe Aviation stated, "Further, the Company believes that it has a strong case on merits, backed by advice from external tax advisors. Accordingly, the Company will contest the same before the appropriate authority."
As for expected effect on the company's finances and other operations, it said: "Impact on financial, operation, or other activities of the listed entity, quantifiable in monetary terms to the extent possible. There is no significant impact on financials, operations or other activities of the Company."
Two weeks earlier, the IndiGo parent also announced that the Directorate General of Civil Aviation slapped a Rs 20 lakh penalty on the carrier after it supposedly failed in the "Implementation of Standard Instrument Departure (SID) Instrument Flight Procedure (IFP) formulated by the Company for Udaipur Airport, instead of being promulgated by Airport Authority of India (AAI) as mandated under Rule 133A of The Aircraft Rules, 1937 read along with DGCA CAR 9/EN para nos 2.2 and 2.34."
These penalties come at around the same time IndiGo is looking to inject $820 million into its wholly owned subsidiary, InterGlobe Aviation Financial Services IFSC Private Limited, which it plans to use for the "acquisition of aviation assets, thereby enabling ownership of aircraft."
