Synopsis:
Blue Dart Aviation received a Rs. 420 crore GST demand notice for alleged GST and input credit violations. The company is reviewing the matter and expects no significant impact on operations or finances.
During Wednesday’s trading session, shares of South Asia’s premier express air and integrated transportation & distribution company are in focus on the stock exchanges, after the company’s arm received a GST demand notice of over Rs. 420 crore from the Commissioner of GST and Central Excise.
At 12:35 p.m., the shares of Blue Dart Express Limited were trading in the red at Rs. 5,731.05 on BSE, as against its previous closing price of Rs. 5,742.4, with a market cap of Rs. 13,599 crores. The stock has delivered negative returns of around 38 percent in the last one year, and has fallen by over 1 percent in the last one month.
What’s the News
As per the latest exchange filings, Blue Dart Aviation Limited, a wholly owned subsidiary of Blue Dart Express Limited, has received a Show Cause Cum Demand Notice (SCN) from the Office of the Commissioner of GST and Central Excise covering the tax period from April 2021 to March 2023.. The notice related to alleged tax dues and input credit violations amounting to over Rs. 420 crore.
The SCN, issued by the Office of the Commissioner of GST and Central Excise (Chennai South Commissionerate), raised a demand of Rs. 365.58 crore – comprising CGST of Rs 182.79 crore and SGST of Rs 182.79 crore – during FY22 and FY23. The authorities allege that the company incorrectly paid this tax under IGST instead of CGST and SGST, and have questioned the validity of this claim while seeking recovery.
Additionally, the notice flagged Rs. 54.55 crore as ineligible Input Tax Credit (ITC). The authorities contend that the ITC was claimed based on invoices from locations outside the applicable jurisdiction, which they argue should not have been allowed. A further Rs. 0.64 crore was cited as ITC/CENVAT credit written off in the company’s books, for which the authorities have also proposed recovery.
The SCN further recommends the recovery of interest and penalties under Sections 73, 122, and 125 of the CGST Act, 2017, in addition to the principal tax demand. The notice also raises concerns regarding why associated penalties and interest under various provisions of the CGST and IGST Acts should not be imposed on the company.
Blue Dart Aviation has been asked to submit its response within 30 days to the Additional/Joint Commissioner of GST & Central Excise, explaining why the proposed recovery should not be enforced.
The company is currently reviewing the matter and plans to file its response within the stipulated period. It does not expect any material impact on its financial performance, operations, or overall business activities as a result of this notice.
Financials & more
Blue Dart reported a marginal growth in its revenue from operations, showing a year-on-year increase of around 7 percent from Rs. 1,343 crores in Q1 FY25 to Rs. 1,442 crores in Q1 FY26. In contrast, its net profit decreased during the same period from Rs. 53 crores to Rs. 49 crores, representing a decline of around 8 percent YoY.
Blue Dart Express Limited, a part of DHL Group’s OHL e-commerce division, is engaged in the business of integrated air and ground transportation and distribution of time sensitive packages to various destinations, primarily within India.
The company accesses the largest and most comprehensive express and logistics network worldwide, covering more than 220 countries and territories. It offers an entire spectrum of distribution services including air express, freight forwarding, supply chain solutions, customs clearance etc.
Blue Dart operates with its fleet of six Boeing 757-200 and two Boeing 737 freighter aircraft, offering a payload of 500+ tonnes per night, a flotilla of over 12,000+ vehicles, 2,284 facilities, and 549 e-vehicles across 56,400 locations in India.
Written by Shivani Singh
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