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Service Tax Dept Freezes AI, Kingfisher Accounts For Default

Mumbai, Dec 8: Debt-ridden Air India and Kingfisher hit an air pocket again with some of their bank accounts being frozen by central tax authorities for non-payment of service tax to the tune of Rs
service tax dept freezes ai kingfisher accounts...
India TV News Desk December 08, 2011 21:34 IST

Mumbai, Dec 8: Debt-ridden Air India and Kingfisher hit an air pocket again with some of their bank accounts being frozen by central tax authorities for non-payment of service tax to the tune of Rs 220 crore collected from passengers. 

“We have frozen 11 accounts of Air India and 10 accounts of Kingfisher Airlines for defaulting on service tax payments over the past five days,” Commissioner of service tax, Zone 1 (Mumbai Commissionerate, Central Board of Excise and Customs) S K Solanki told PTI here today.

“While Air India owes us a staggering Rs 150 crore in dues, the amount from Kingfisher is about Rs 70 crore,” he added.

Solanki said both the air carriers have defaulted on their payment of the service tax though they collected the same from their customers. Action had to be initiated against them because they failed to clear their dues in the “sufficient time” given to them, he added. 

When contacted, an Air India spokesperson confirmed the development and he said the state-owned airline is hopeful of making a part payment to the department today.  “Our objective is to defreeze the accounts,” he said.

Civil Aviation Minister Vayalar Ravi when asked for his comments said he did not have any information so far but was confident the matter will be sorted out.

“I don't have any information so far. I will ask for it. We will sort it out,” Ravi said.

A Kingfisher spokesperson did not want to comment on the issue. “No comments,” the spokesperson said. 

According to the service tax department, Kingfisher owed the sum for the April-September period while for Air India it is for the period between April and August. 

Significantly, for liquor baron Vijay Mallya-promoted Kingfisher, this is the second time within a month that its account has been frozen by the service tax department.

The Kingfisher account was first frozen for two days in the first week of last month and it was only after getting an assurance from the airline officials that they would deposit the dues in three instalments did the department withdrew its order, Solanki said.

 

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