Four attempts later, service tax dept sells Mallya’s luxe jet for paltry Rs 35cr
Authorities had put the luxury A319 jet, which Mallya used to crisscross the world to solicit business deals, under the hammer to recover their dues to the tune of Rs 800 crore accumulated on account of non-payment of service tax before his erstwhile Kingfisher Airlines went belly up in October 2012.Updated: Jul 01, 2018 15:12 IST
After at least four aborted attempts since March 2016, service tax authorities have finally managed to get a buyer for the confiscated luxury jet of disgraced liquor baron Vijay Mallya, with Florida-based Aviation Management Sales emerging as the highest bidder for Rs 34.8 crore ($5.05 million) last Friday, a source has said.
Authorities had put the luxury A319 jet, which Mallya used to crisscross the world to solicit business deals, under the hammer to recover their dues to the tune of Rs 800 crore accumulated on account of non-payment of service tax before his erstwhile Kingfisher Airlines went belly up in October 2012.
The transaction was completed last Friday through an e-auction, following a Karnataka high court order, the source said, adding that the jet has been parked at a hangar of Mumbai airport since its confiscation in 2013. The deal will go through only after the Bombay high court’s approval.
“Mallya’s private luxury jet has finally found a buyer at an e-auction conducted by the state-run auctioneer MSTC last Friday. Florida-based firm Aviation Management Sales LLC quoted the highest bid of Rs 34.8 crore and won the bid,” the source told PTI.
The department had initially fixed Rs 152 crore as the reserve price at the first auction attempt in March 2016. However, a lone bidder turned up and quoted a meagre Rs 1.09 crore. The department rejected the bid and then lowered the reserve price by 10%.
The service tax department was forced to sell the aircraft after the Mumbai airport operator MIAL moved Bombay HC seeking a direction to the department citing heavy losses on account of the non-productive use of its space. The auction, in the past, had failed as the bids were much below the reserve price, which was cut to $12.5 million from $22.5 million initially.
The last bidding was conducted by MSTC in March 2017. This January, the Bombay HC had directed the official liquidator of the Karnataka HC, who has been in charge of the assets and books of Kingfisher Airlines, to take required steps to take away the plane as it is been occupying space at the highly congested Mumbai airport all these while.
First Published: Jul 01, 2018 15:11 IST