New Delhi, July 14 -- In a relief for airlines such as IndiGo and SpiceJet, the Supreme Court on Monday dismissed a plea by the customs department seeking to impose integrated goods and services tax (IGST) on re-imported aircraft and parts sent overseas for repairs. The tax demand was based on a 2021 government notification that sought to clarify and retrospectively amend a 2017 exemption.

Under the original 2017 notification, airlines were required to pay only basic customs duty (BCD) on the cost of repairs, freight, and insurance when re-importing aircraft parts after overseas maintenance. In 2021, the government clarified that IGST was also applicable on the repair value and freight-and attempted to apply this retrospectively to past ...