Kingfisher owes Rs 60 crore in service tax outstandings: Dept

kingfisher3-afp_30.jpg.crop_display.jpg

Kingfisher Airlines continues to default on its service tax outstandings, amounting of over Rs 60 crore, and the government move to allow FDI policy in civil aviation sector offers the 'only ray of hope' to recover the dues from the debt-ridden airline, according to a top tax official.

Kingfisher has said it is in talks with foreign carriers for bringing in FDI, a move that is expected help it overcome financial troubles.

"Kingfisher Airlines continues to be a defaulter and has an outstanding of over Rs 60 crore. It is defaulting on the weekly payments and most of its bank accounts are frozen," Mumbai Service Tax Commissioner Sushil Solanki told agencies.

As the department has frozen almost all the accounts of the ailing airline, which is forced to operate only a skeletal schedule due to drop in services, it is very difficult for the carrier to pay its dues as cash flows are down to a trickle.

Kingfisher has not been depositing service tax collected from passengers with the department since November last on a regular basis and instead has been diverting it for other purposes on a regular basis.

As the airline started defaulting on tax payment, the department started freezing its bank accounts since November last.

The Vijay Mallya-promoted airline's total outstanding dues stood at Rs 60 crore, from a high of Rs 140 crore, after its bank accounts were frozen.

"A full payment of dues is very difficult and the only way by which the money can come in is via a foreign partner's fund infusion, if it goes through," Solanki said.

Mallya said in Bengaluru on Wednesday that Kingfisher was talking with foreign airlines.

"Yes, we are in talks," he told reporters on the sidelines of the annual general meeting of the UB Group promoted by him.

According to Solanki, the national carrier Air India also owes huge dues to the department totalling over Rs 250 crore.

"Air India has told us that they are likely to get an equity infusion and they will pay us out of that," he said, adding only a few of the state-run carrier's accounts have been frozen.

In a strategic move, the government recently allowed up to 49 per cent direct equity holding by foreign carriers in domestic airlines.

Kingfisher, which currently operates only around 50 services a day with just seven aircraft, is hoping to catch the FDI line thrown by government to bail itself out of the fund crunch.

Kingfisher owes over Rs 7,000 crore to 17 banks in the long-term debt besides the income tax obligation apart from accumulated losses of around Rs 8,000 crore.

Post new comment

<form action="/comment/reply/191727" accept-charset="UTF-8" method="post" id="comment-form"> <div><div class="form-item" id="edit-name-wrapper"> <label for="edit-name">Your name: <span class="form-required" title="This field is required.">*</span></label> <input type="text" maxlength="60" name="name" id="edit-name" size="30" value="Reader" class="form-text required" /> </div> <div class="form-item" id="edit-mail-wrapper"> <label for="edit-mail">E-Mail Address: <span class="form-required" title="This field is required.">*</span></label> <input type="text" maxlength="64" name="mail" id="edit-mail" size="30" value="" class="form-text required" /> <div class="description">The content of this field is kept private and will not be shown publicly.</div> </div> <div class="form-item" id="edit-comment-wrapper"> <label for="edit-comment">Comment: <span class="form-required" title="This field is required.">*</span></label> <textarea cols="60" rows="15" name="comment" id="edit-comment" class="form-textarea resizable required"></textarea> </div> <fieldset class=" collapsible collapsed"><legend>Input format</legend><div class="form-item" id="edit-format-1-wrapper"> <label class="option" for="edit-format-1"><input type="radio" id="edit-format-1" name="format" value="1" class="form-radio" /> Filtered HTML</label> <div class="description"><ul class="tips"><li>Web page addresses and e-mail addresses turn into links automatically.</li><li>Allowed HTML tags: &lt;a&gt; &lt;em&gt; &lt;strong&gt; &lt;cite&gt; &lt;code&gt; &lt;ul&gt; &lt;ol&gt; &lt;li&gt; &lt;dl&gt; &lt;dt&gt; &lt;dd&gt;</li><li>Lines and paragraphs break automatically.</li></ul></div> </div> <div class="form-item" id="edit-format-2-wrapper"> <label class="option" for="edit-format-2"><input type="radio" id="edit-format-2" name="format" value="2" checked="checked" class="form-radio" /> Full HTML</label> <div class="description"><ul class="tips"><li>Web page addresses and e-mail addresses turn into links automatically.</li><li>Lines and paragraphs break automatically.</li></ul></div> </div> </fieldset> <input type="hidden" name="form_build_id" id="form-2171bdb168db9474e5fed4bc6551ab92" value="form-2171bdb168db9474e5fed4bc6551ab92" /> <input type="hidden" name="form_id" id="edit-comment-form" value="comment_form" /> <fieldset class="captcha"><legend>CAPTCHA</legend><div class="description">This question is for testing whether you are a human visitor and to prevent automated spam submissions.</div><input type="hidden" name="captcha_sid" id="edit-captcha-sid" value="64052184" /> <input type="hidden" name="captcha_response" id="edit-captcha-response" value="NLPCaptcha" /> <div class="form-item"> <div id="nlpcaptcha_ajax_api_container"><script type="text/javascript"> var NLPOptions = {key:'c4823cf77a2526b0fba265e2af75c1b5'};</script><script type="text/javascript" src="http://call.nlpcaptcha.in/js/captcha.js" ></script></div> </div> </fieldset> <span class="btn-left"><span class="btn-right"><input type="submit" name="op" id="edit-submit" value="Save" class="form-submit" /></span></span> </div></form>

No Articles Found

No Articles Found

No Articles Found

I want to begin with a little story that was told to me by a leading executive at Aptech. He was exercising in a gym with a lot of younger people.

Shekhar Kapur’s Bandit Queen didn’t make the cut. Neither did Shaji Karun’s Piravi, which bagged 31 international awards.