Air India, Kingfisher Airlines accounts frozen by service tax dept for non-payment of dues

Mumbai: The service tax department has frozen the bank accounts of Air India and Kingfisher Airlines for non-payment of dues.
While the state-run carrier has dues of Rs 170 crore, the Vijay Mallya-promoted airline has to pay 100 crore as service tax liability.
Air India chairman and managing director Rohit Nandan told ET that Air India paid 85 crore on Thursday and expects its account to be de-frozen now. Kingfisher, however, refused comment on the matter.
A company cannot operate any of its bank accounts or write a cheque if its accounts are frozen until recoveries are made. Tax experts say a freeze on bank accounts is a standard procedure when statutory dues are not paid by assesees despite notices being served to them.
"Freezing of accounts will not happen just because of non-payment of past two months' dues; there must have been a pattern of default by the companies," said Ramesh Vaidyanathan, partner, Advaya Legal.
Kingfisher, India's third largest airline, which has not paid salaries to a part of its 7,000-strong workforce for over two months now, is already operating on a daily cash clearance basis of Rs 50 lakh at the Mumbai airport, where it owes authorities Rs 90 crore for aeronautical service charges.
It could not be ascertained whether the service tax authorities had ordered any recovery of dues from Kingfisher yet or if the airline had approached authorities seeking relief.
09/12/11 Manisha Singhal & M Padmakshan/Economic Times

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Categories: Air India Dec 2011, Kingfisher Dec 2011