According to a government order issued on Thursday, the centre reversed its earlier decision to scrap such taxes, as authorities seek to recalibrate revenue from the energy sector amid heightened volatility in global oil markets. This came along with a reduction in excise duty on petrol and diesel meant for domestic consumption.
Announcing the decision, Finance Minister Nirmala Sitharaman, on social media platform X, said that the rise in duties imposed on exports of diesel at Rs 21.5 per litre and on ATF at Rs 29.5 per litre will ensure adequate availability of these products for domestic consumption.
In view of the West Asia crisis, the central excise duty on petrol and diesel for domestic consumption has been reduced by ₹10 per litre each. This will provide protection to consumers from rise in prices. Hon. PM @narendramodi has always ensured that citizens are protected from…
— Nirmala Sitharaman (@nsitharaman) March 27, 2026
Meanwhile, IndiGo announced on Thursday that it has received a GST demand order for FY20-FY25, along with interest and penalty worth more than Rs 42.92 crore from the GST authorities in Gurugram. “The department has erroneously passed an order, imposing demand along with interest and penalty on services not received and paid by the company,” the airline said.
Live Events
IndiGo added that it will contest the order and take appropriate legal remedies, as it strongly believes that the order was passed by the department not in accordance with the law but was backed by advice from external tax advisors. It said that the order has no significant impact on the financial, operations or other activities of the company.
Goldman Sachs recently trimmed its target price for the shares of IndiGo to Rs 5,200 apiece, while maintaining its Buy call on the counter. The latest target price implies an upside potential of more than 21% from the previous closing price of Rs 4,295 apiece.
Analysts said the target price cut was due to rising fuel costs and near-term weakness in Middle East traffic. The brokerage now expects EBITDAR of around Rs 13,700 crore for FY26, Rs 15,900 crore for FY27 and Rs 24,400 crore for FY28.
ATF accounts for a significant portion of airlines’ operating costs. ATF prices have significantly surged amid an overall surge in oil prices since the onset of the war between Iran and US-Israel earlier this month. The disruption to international operations due to the conflict also impacts the airline stocks.
IndiGo shares have fallen around 15% in the past one month, while SpiceJet shares crashed 36% during the same period.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)