Jet’s service tax liability Rs260 cr over 5 yrs: govt

Mumbai: A service tax audit report on Jet Airways (India) Ltd, the country’s second largest carrier by passengers flown, says that the airline owes about Rs260 crore, including interest, to the service tax department for the five fiscal years between 2003-04 and 2007-08, two officials of the department said. The service tax agency carried out an audit of the Mumbai-based carrier in March. Such audits are conducted by the department to improve compliance with service tax norms and to detect any instances of tax evasion.
“Jet Airways has received a show cause notice from the service tax department demanding service tax on various foreign exchange related expenses, which is based on import of services rules,” a Jet Airways spokesperson said in an email response to a Mint questionnaire.
“This matter has been referred to our lawyers and they are in the process of drafting an appropriate response. We have sought time till September 2009 to submit our response,” the spokesperson added. “After due consultations and consideration of various case laws, we are confident that a substantial portion of this demand would be set aside (or not be applicable) and liabilities if at all any, would be very negligible.”
A show-cause notice is not an indictment, but only seeks an explanation from a company, typically within a month.
The audit report was reviewed by Mint. It will be acted upon by various divisions of the service tax department, depending on the jurisdiction.
Jet Airways’ executive director Saroj K. Datta said he “is not aware about any such report”. The two service department officials didn’t want to be named. “This is the first ever audit of Jet Airways,” one of them said.
30/07/09 Khushboo Narayan and P.R. Sanjai/Livemint

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Categories: Jet Airways Jul 2009