Taxmen seize Kingfisher jets; airline in seizure
Is it the beginning of the end for bleeding Kingfisher Airlines (KFA) that has been grounded since October? After bankers, employees and the civil aviation regulator, it is now the turn of tax authorities to tighten the noose on the Vijay Mallya-led carrier which is in red.delhi Updated: Dec 12, 2012 00:46 IST
Is it the beginning of the end for bleeding Kingfisher Airlines (KFA) that has been grounded since October? After bankers, employees and the civil aviation regulator, it is now the turn of tax authorities to tighten the noose on the Vijay Mallya-led carrier which is in red.
In the last four days, two Kingfisher jets have been seized in Mumbai by the service tax department after the airline failed to pay tax dues to the tune of Rs. 63 crore. A notice issued by the service tax department states that the airline has additional outstanding dues to the tune of Rs. 128 crore. Tax officials said the department has informally directed the airline not to move four more planes, as they too might be impounded. The planes were confiscated between December 8 and 10.
PTI reported that four others planes, on lease with KFA, had been taken away by the lessor after it failed to pay lease rentals, but this could not be confirmed. KFA, saddled with a $2.5 billion (Rs. 11,000 crore) debt, owes money to lessors, suppliers, lenders, airline partners, employees, oil companies, airports and the tax department. Its accumulated losses at the end of the 2012 financial year were more than 50% of its net worth.
As airline employees languish, there is no revival plan in sight yet.
Mallya had met the aviation regulator , the Director-General of Civil Aviation (DGCA) last Friday and assured him that the airline plans to submit a revival plan before the end of the month.
The airline has written to the service tax department that it wasn't the owner of the aircraft (VT KAR) that had been "detained" by the department and had taken it on an operating lease basis. "If, despite this, you continue with your detention order, we reserve all our rights including the right to claim such damages and other compensation from your department that we may suffer," A Ragunathan, CFO, KFA, wrote to the service tax department on December 10.