IndiGo said on Friday it has been slapped with a penalty of a little over Rs 1.27 crore related to GST input tax credit and that it will challenge the order.

In a filing to the BSE, the airline’s parent InterGlobe Aviation said it has been denied input tax credit availed and received a demand along with interest and penalty from the Office of the Joint Commissioner of State Tax (Appeals) IV Bandra, Mumbai.

"The company believes that the order passed by the authorities is erroneous and it has a strong case on merits, backed by advice from external tax advisors," it added.

The fine totalling Rs 1.27 crore is for the period between July 2017 and March 2018.

While noting that there is no significant impact on financials, the company also said it would contest the same before the appropriate authority.