Decide on Spicejet plea to pay tax in tranches: HC to GST body
The Punjab and Haryana high court has asked the GST department to consider and pass an order on low-cost airline Spicejet’s plea to pay its tax dues in instalments.
The GST authorities issued a notice to Spicejet in late July, asking it to pay tax liabilities of ~80.6 crore and furnish details of movable and immovable properties, warning that they would initiate recovery proceedings if the payment was not made.
Spicejet did not dispute the tax liability in its petition. The company, however, opposed any recovery proceedings and had requested the tax authorities to allow it to pay the dues in 24 instalments, instead of a single payment.
“Having heard the learned counsel appearing for both the parties, we find the prayer of the learned senior counsel for the petitioner to be a fair one. Consequently, we dispose of this writ petition with a direction to the Excise and Taxation Commissioner of State Tax, Haryana, to decide the representation by passing a speaking order within a period of two weeks from the date of receipt of the certified copy of this order,” the court said in its order.
“Since the tax liabilities were never opposed by Spicejet and it had requested the authorities that it be allowed to pay the amount in instalments due to the losses during the pandemic, a writ petition was filed opposing recovery proceedings. The court has recognised this and has asked the tax authorities to decide on the company’s request,” said Anuj Dewan, who represented Spicejet in the case.
The excise and taxation department of Haryana on July 27 sent a showcause notice to the airline, stating that the company hadn’t paid tax dues of ~80.6 crore, which includes the period of FY20, FY21 and FY22 (April-june). The department said if the dues were not cleared by August 4, it will initiate recovery proceedings.
Spicejet responded saying that since the company is facing acute cash crunch due to the adverse impact of Covid19, and sought permission to pay the liabilities in 24 equal monthly instalments.
The company said it had deposited ~13.6 crore to clear outstanding liability for February-july 2020 and ~33.76 crore as GST liability for August-december 2020.
The company had further claimed that it was entitled to get the refund of about ~36 crore of IGST paid on reimport of engine and APU and asked the GST authorities to adjust the amount against IGST claims.
In January, The Customs, Excises, and Service Taxes Appellate Tribunal (CESTAT), New Delhi Bench, ruled that Spicejet was entitled to exemption from payment of Integrated Goods and Service Tax (IGST) on re-import of repaired parts or aircraft into India.