FinMin to recover Rs 200 crore tax from Kingfisher, to rope in DGCA

Tags: News

Airlines’ Rs 7,700 cr debt has been a non-performing asset for most banks

After having frozen the accounts, finance ministry is now working on a comprehensive plan to recover tax dues worth over Rs 200 crore from debt-ridden Kingfisher Airlines (KFA). This will include roping in aviation regulator and even prosecution of top brass if the company fails to pay up.

“Finance minister has asked both central board of direct taxes (CBDT) and central board of excise and customs (CBEC) to work out a comprehensive plan to recover tax dues from Kingfisher Airlines,” CBEC, chairman, Praveen Mahajan said. She added that the two boards have quantified the amount that Kingfisher owes to the government.

Mahajan spoke to reporters on the sidelines of an event organised by CII.

According to Mahajan, the board has already frozen KFA’s accounts and taken all actions possible under the service tax act in the interest of the board. Kingfisher Airlines, which has been making losses since its inception in 2005, owes more than Rs 200 crore in taxes to the government.

Besides, the Vijay Mallya-owned airlines has a debt of about Rs 7,700 crore, which has been a non-performing asset (NPA) for most of the banks around last one year.

The CBEC chief indicated that the revenue department might talk to aviation regulator, director general of civil aviation (DGCA), as the beleaguered airlines is likely to submit a comprehensive revival plan to the regulator by this month-end.

“Prosecution also might happen. But everything takes time. There are different steps you have to take before you prosecute somebody,” she said, adding that it depends on whether they comply with whatever is demanded.

Though the KFA operations are still under suspension after DGCA withdrew its flying permit till the company submits a turnaround plan, there is hope of some equity infusion into the airlines after Mallya sold controlling stake of 53.4 per cent in United Spirits (USL) to Diageo group for $2 billion on November 9.

Besides CBEC is also hopeful of meeting the indirect tax collection target of Rs 5.05 lakh crore for 2012-13. “Tax collection is doing better. We are hopeful of meeting the target as service tax collection growth is already more than 35 per cent,” she said.

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