In fresh trouble for India's largest airline, IndiGo informed the stock exchanges that a penalty of nearly ₹59 crore linked to goods and services taxes (GST) has been imposed on the domestic carrier.

According to the filing issued on Friday, 12 December, the airline said that the additional Commissioner of CGST, Delhi South Commissionerate, has levied a fine of ₹58,74,99,439 for the financial year 2020-21. "The department has raised GST demand along with a penalty," IndiGo noted.

The latest development comes amid significant disruptions in IndiGo's operations, including hundreds of flight cancellations and delays over the past few days, primarily due to crew shortages and various other factors.

What does IndiGo plan to do next?

Calling the order "erroneous", IndiGo plans to contest it before the appropriate authorities.

"The Company believes that the order passed by the authorities is erroneous. 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," the filing read.

The airline further assured that the order has no significant impact on the company's financials, operations, or other activities.

IndiGo share price

The airline informed the exchanges regarding the penalty order following market hours on Friday, 12 December. Shares of Interglobe Aviation, IndiGo's parent, closed 0.86% higher at ₹4,860.85 on the BSE on Friday.

IndiGo crisis

IndiGo has cancelled over 5,000 flights this month due to a significant crew shortage caused by its inability to implement new regulations for pilots.

The airline had earlier pointed out some preliminary factors contributing to the disruption, including recent amendments to the Flight Duty Time Limitations (FDTL) order.

Earlier, the Directorate General of Civil Aviation (DGCA) had issued a show-cause notice to CEO Pieter Elbers and COO Isidore Porqueras after several flight cancellations. The airline requested additional time, stating that it is "realistically not possible to pinpoint the exact cause(s)" at present, given the "complexity and vast scale of operations".

Meanwhile, the IndiGo CEO apologised to people whose flights were suddenly cancelled or delayed for different reasons. "Thousands of you could not travel, and we are profusely apologetic about that, " he said.

IndiGo appoints veteran aviation expert

IndiGo's board appointed veteran aviation expert John Illson-led Chief Aviation Advisors LLC to carry out the "root cause analysis of the recent operational disruption".

"Chief Aviation Advisors LLC, led by Captain John Illson, veteran aviation expert, to conduct an independent expert review and assessment of the recent operational disruption and the contributing factors. The objective is to conduct an independent root cause analysis of the recent operational disruption, besides opportunities for improvement," PTI quoted the airline's statement.

Concerns of potential antitrust violations

India's antitrust regulator, the Competition Commission of India (CCI), is examining whether IndiGo has violated competition regulations, the news portal reported on Friday, citing a senior official.

CCI is conducting an internal review to determine whether IndiGo breached competition norms, the senior official told the news agency.

According to the official, several factors, including the overall dominant position, dominance in specific routes, and potential abuse of dominance, will be examined.