Air India’s accounts frozen as service tax long overdue

The Central Board of Excise and Customs has once again frozen the bank accounts of national carrier Air India for non-payment of service tax dues running to a little over Rs300 crore.

This is the second time in two months that the Central Board of Excise and Customs has frozen the account of the national carrier. In December, the department had frozen as many as 11 accounts of Air India and 10 of the private carrier Kingfisher Airlines, which were later de-frozen following part payments by the airlines.

The development comes even as bankers have reportedly met on Thursday to consider a fresh CDR proposal for the debt-laden flag carrier.

"Yes, we have frozen 11 bank accounts of Air India as they have not made any payment after the part-payments done last month," a senior official of the Central Board Excise and Customs told PTI on Thursday evening.

Early this week, Central Board of Excise and Customs (CBEC) chairman SK Goel had said that the debt-ridden Kingfisher Airlines and Air India owed the government a total of over Rs 360 crore towards service tax dues.

"While Kingfisher Airlines has paid Rs 20 crore (Rs 200 million) towards service tax for December and some arrears, the airline still owes Rs60.33 crore (Rs 603.3 million)," Goel had said. However, it has promised to clear its dues by March-end.

AI is seeking an equity infusion of Rs 6,600 crore (Rs66 billion) from the government to enable it to pay interest on fleet acquisition and to meet other expenses including salaries to its 30,000 employees, which have remained unpaid for the past two months, and unpaid allowances for the past five months, which prompted a section of the cabin crew to strike work early this week.