Kingfisher fails to pay employee income tax

New Delhi: India’s Kingfisher Airlines has not paid the income tax it deducted from employees’ salaries over the past two years, a junior finance minister said, in the latest sign the cash-strapped carrier is struggling to keep flying.
S.S. Palanimanickam, a member of India’s ruling coalition, said on Tuesday that the government had started proceedings to recover Rs1.3bn ($24.6m) from the lossmaking airline.
A “survey has been conducted?.?.?.?which revealed that the airline had not adhered to TDS [tax deduction at source] provisions”, the minister told parliament. “Proceedings have been initiated?.?.?. for financial year 2010-11to crystallise the default amount, levy interest on delayed payment and take further statutory actions.”
Kingfisher declined to comment.
The minister’s remarks were seen as an indirect message to Vijay Mallya, the tycoon who controls the airline, that the government might block state-owned banks from lending to Kingfisher.
“The minister used parliament to tell Vijay Mallya that if he wants money from the banks he needs to pay his dues,” said Sharan Lillaney, an aviation analyst at Angel Broking in Mumbai.
20/12/11 James Fontanella-Khan/Financial Times

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Categories: Kingfisher Dec 2011