Tax bodies in joint plan to recover KFA dues
The revenue department is working on a comprehensive plan to recover tax dues from debt-ridden Kingfisher Airlines (KFA), which owes more than Rs 200 crore to the exchequer, a top finance ministry official said today, HT reports. Fly five star: money for nothing, and kicks for free?business Updated: Nov 21, 2012 01:25 IST
Vijay Mallya-led Kingfisher Airlines (KFA) faces the prospect of prosecution if it fails to clear its tax dues of more than Rs. 200 crore, a top government official said on Tuesday, adding to growing concerns over the future of the debt-laden carrier, which has been grounded since October.
The finance minister has empowered the Central Board of Excise and Customs (CBEC) and Central Board of Direct Taxes (CBDT) - the national agencies responsible for administering taxes - to formulate a comprehensive plan for taking suitable action against KFA and recover outstanding dues, CBEC chairperson, Praveen Mahajan said on the sidelines of a Confederation of Indian Industry (CII) conference here.
"We will also look at using the option of prosecution, but it takes time to consider such a step," she said.
KFA has reported a record loss of Rs. 754 crore for the second-quarter ending September 30 as its revenues crashed 87% to Rs. 200 crore hit by disruption in operations leading to the eventual suspension of its licence by aviation regulator Directorate General of Civil Aviation (DGCA) last month.
Banks, which have lent Rs. 7,600 crore the ailing carrier, want the airline's promoters to bring in a minimum of $1 billion (about Rs. 5,400 crore) from any source by month-end for its revival.
The airline said that it was "preparing a comprehensive plan for re-start of operations which will be shared with the DGCA and bankers."
Speculation is rife that Mallya may infuse capital in KFA by using part of Rs. 5,724 crore he will earn by selling his stake in his flagship liquor business United Spirits Ltd to British liquor-maker Diageo. In a deal announced earlier this month, both the companies said that Diageo will buy 54.3% stake in USK for Rs. 11,166.5 crore.