CBEC de-freezes bank accounts of Air India, Kingfisher
15 Dec 2011
The Central Board of Excise and Customs (CBEC) has de-freezed the bank accounts of beleaguered airlines Kingfisher and Air India, after they made part-payment of their service tax dues.
Kingfisher made an interim payment of Rs9 crore to the CBEC, while state-owned Air India paid Rs8 crore against dues for November. Air India owes the CBEC about Rs310 crore in service tax dues and Kingfisher owes it about Rs110 crore.
Earlier in the month, the tax authorities froze 11 bank accounts of Air India and 10 of Kingfisher for non-payment of service tax dues. The service tax department had even earlier frozen Kingfisher's bank accounts after it failed to pay its dues.
Kingfisher, owned by liquor baron Vijay Mallya, has promised to clear all its service tax dues by the end of March. Both airlines have been collecting service tax from their passengers, but have failed to pay the tax authorities.
Earlier this week, Mallya met CBEC chairman S K Goel and requested that the freeze on the airline's bank accounts be lifted. He promised to make a partial payment for the November dues.
Both Air India and Kingfisher are over-burdened with debts and are facing a massive liquidity crunch. Kingfisher, which has piled up debts amounting to Rs6,419 crore, has accumulated losses adding up to Rs4,000 crore.