Winning Bizness Desk
Mumbai. India’s budget airline SpiceJet has come under fresh regulatory pressure after the Goods and Services Tax (GST) Department issued a tax demand notice of nearly ₹125 crore. The development adds to the challenges already facing the cash-strapped carrier, which has been battling financial stress for a prolonged period. Officials have alleged that the airline failed to file GST returns for several months, prompting authorities to begin action that could eventually lead to cancellation of its GST registration.
GST authorities have also served a show-cause notice to the airline for repeated delays in filing returns and non-compliance with statutory requirements. The notice proposes cancellation of the company’s GST registration. Officials said the action follows continued violations despite repeated opportunities to regularise filings. The move signals a tougher stance by tax authorities against persistent non-compliance.
Tax demand spread across five months
According to GST officials, SpiceJet has shown “continuous irregularities” in filing returns and has repeatedly submitted them beyond prescribed deadlines. Following the delays, authorities carried out a provisional assessment under Section 62 of the Central Goods and Services Tax (CGST) Act and the State GST (SGST) Act, 2017.
The assessment resulted in a total tax demand of ₹124.65 crore. The month-wise breakup is:
- November: ₹44.44 crore
- December: ₹43.79 crore
- January: ₹12.19 crore
- February: ₹12.10 crore
- March: ₹12.12 crore
Officials said the assessment was based on available records after the airline failed to submit returns within the stipulated period.
Show-cause notice issued on May 25
Tax authorities revealed that a separate show-cause notice regarding cancellation of GST registration had already been issued to SpiceJet on May 25, 2026. However, according to officials, the airline has yet to complete the pending compliance requirements mentioned in the notice.
Key concerns flagged by authorities include:
- Non-filing of GST returns for several months
- Repeated delays in statutory filings
- Failure to meet compliance obligations
- Continued irregularities despite warnings
Officials indicated that the company still has an opportunity to respond and address pending issues before further action is taken.
What Section 62 of GST law says
Section 62 of the GST framework empowers tax authorities to conduct a best-judgment assessment when a registered taxpayer fails to file returns despite receiving notices. In such cases, officials can estimate tax liability using available information and issue a demand notice accordingly.
An official said that if SpiceJet does not file its pending returns and fulfil its legal obligations under GST provisions, stricter action may follow in accordance with the law. The department has stressed that compliance remains mandatory for all registered entities irrespective of their financial condition.
Cancellation could disrupt operations
The possible cancellation of GST registration could have serious implications for the airline’s business operations. A company without a valid GST registration faces difficulties in carrying out commercial transactions and collecting taxes in a legally recognised manner.
Such a step can affect routine business activities, vendor relationships, invoicing processes and overall financial operations. For SpiceJet, which is already navigating financial challenges, the latest tax dispute could become another major hurdle unless pending returns are filed and compliance issues are resolved quickly. The coming weeks are likely to be crucial as the airline responds to the notices and attempts to avoid stronger regulatory action.
