Delhi High Court seeks Customs response to IndiGo plea over refund of ₹900 crore in re-import duties

The Delhi High Court on Friday sought a response from the Customs Department on a plea filed by IndiGo Airlines 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. [Interglobe Aviation v. Deputy Commissioner (refund) Customs]

A Bench of Justices V Kameswar Rao and Vinod Kumar passed the order and listed the case for hearing in April 2026.

IndiGo has challenged the levy of customs duty on aircraft engines and parts that were re-imported into India after being sent overseas for repairs.

The airline submitted that at the time of re-import, it paid basic customs duty without dispute. Separately, since repairs constitute a service, IndiGo also discharged Goods and Services Tax (GST) on a reverse-charge basis. Despite this, customs authorities treated the same transaction as an import of goods and sought to levy customs duty again.

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.

Despite these rulings, customs authorities allegedly compelled IndiGo to pay the duty to secure clearance of aircraft engines and other critical components. The airline argued that unlike GST, which is self-assessed, customs clearance depends on officer approval and aircraft could not be grounded indefinitely. As a result, it paid the duty under protest across more than 4,000 bills of entry, amounting to over ₹900 crore.

When IndiGo later filed refund claims, customs authorities rejected them on the ground that the airline must first seek reassessment of each bill of entry. IndiGo countered that duties had been paid under protest in every case and that speaking orders had already been passed on the protested assessments, against which appeals were pending.

The airline also contended that the department’s reliance on the Supreme Court’s decision in ITC Ltd. was misplaced. According to IndiGo, that ruling applied to cases where duty was voluntarily paid and later sought to be refunded, not to situations where duty was paid under protest.

IndiGo further told the Court that despite repeated representations, including to the Principal Commissioner, no reassessment orders had been passed. It argued that insisting on reassessment even after a declaration of unconstitutionality effectively denied it the benefit of the ruling.