IndiGo Hit With ₹58.75-Crore Tax Penalty as DGCA Steps Up Scrutiny Amid Operational Crisis

The crisis-ridden IndiGo received a tax penalty notice of Rs 58.75 crore on December 11 from the Additional Commissioner of CGST, Delhi South Commissionerate, for the financial year 2020-21, the company announced on Friday.

In a filing to the BSE, IndiGo termed the tax order erroneous. It asserted that it has a strong case on merits, supported by external tax advisors.

The carrier emphasised that the development is not expected to materially impact its financial position, day-to-day operations, or broader business activities.

Earlier, the Directorate General of Civil Aviation (DGCA) suspended four Flight Operations Inspectors (FOI), who are responsible for overseeing airline safety, pilot training, & operational compliance.

The four-member panel comprises Joint Director General Sanjay Brahamane, Deputy Director General Amit Gupta, senior Flight Operations Inspector Kapil Manglik, and FOI Lokesh Rampal, with a mandate to identify the root causes of widespread operational disruptions at the leading domestic carrier.

Further, IndiGo CEO Pieter Elbers has been summoned to appear before a DGCA Committee of Officers on December 12 as the regulator examines the root causes of the disruptions.

The crisis erupted for the airlines earlier this month due to the flight duty time limitation (FDTL) rules. The rules expanded rest hours, limited night duties, and mandated 48 hours of weekly rest.

Meanwhile, the airlines tendered an apology, saying it is working “round the clock” to restore schedules, but the regulator’s decision to question Elbers signals mounting concern in New Delhi over the airline’s preparedness and transparency.

Officials say the inquiry committee will examine not only the immediate causes of the meltdown but also broader questions about staffing norms, crisis management and the resilience of India’s rapidly expanding but vulnerable aviation market.

For many passengers, the episode has served as a stark reminder of how fragile that system remains. And for the regulator, the summons suggests a shift from mere oversight to accountability — a rare but telling gesture in a sector where operational missteps can cascade into nationwide disorder within hours.

The latest tax demand from GST is added complication for the airline which has already flown into rough weather.

Sources also claimed that the DGCA on Friday sacked four consultants for negligence in matter related to regulatory oversight in the Indigo imbroglio.