The country’s largest airline IndiGo has been fined about Rs 59 crore related to GST. The airline gave this information to the stock market on Friday. Additional Commissioner of Central Goods and Services Tax (CGST), South Delhi Commissioner’s Office, has imposed a penalty of Rs 58,74,99,439 for the financial year 2020–21. Indigo says it will challenge this order. The airline said in its statement that we believe that the order issued by the regulatory authorities is flawed. We have strong arguments in this case, which are also confirmed by the advice of external tax experts. Therefore the company will challenge this order before the concerned authority.
Government cannot fix air fares throughout the year
On the other hand, amid concerns over rising air ticket prices due to the IndiGo crisis, Union Civil Aviation Minister K Ram Mohan Naidu said on Friday that the central government has the right to impose a limit (cap) on air fares in special circumstances. He said the same power was used during the recent IndiGo flight disruptions. However, he also clarified that the government cannot fix air fares throughout the year as it is a common trend for tickets to become expensive during festivals.
Also raised the issue of lack of availability of planes
According to the news, while replying to the discussion on a private motion in the Lok Sabha on measures to regulate air fares in the country, the Minister also raised the issue of lack of availability of aircraft and said that discussions are going on regarding the manufacturing of aircraft in India. This proposal was introduced by Congress MP Shafi Parambil, which was later withdrawn.
Government had imposed distance-based fare limit
Following the recent disruption in IndiGo flights, the central government this month had imposed a distance-based fare cap for domestic flights. Naidu said domestic airfares in India are at par with other countries and it would not be practical to control fares across the country.
Consumers benefit from free market: Naidu
The minister said that the free market ultimately proves beneficial for the consumers and it is natural for tickets to become expensive during festival times. He stressed that deregulation is the basis for the growth of the civil aviation sector. But, he also clarified that free market does not mean that airlines get complete freedom. The government has full power to intervene if needed.
Alliance Air starts fixed fare pilot project
Naidu said that government airline Alliance Air has started a pilot project of fixed airfare for three months. If the scheme provides relief to passengers and the response is positive, the ministry may consider a similar scheme for private airlines as well.
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