In an event organized on Wednesday, S.K. Goel, chairman of the Central Board of Excise and Customs (CBEC) said that Kingfisher Airlines will not be offered any “leeway” and the airline will have to pay the remaining arrears to the tune of Rs 600 million at the earliest.
The tax department of India was paid Rs 200 million by the debt laden company in March 2012. “Kingfisher has paid Rs 20 crore service tax last month and they have promised that they will try to pay as early as they can. Arrears are now about Rs 60 crore,” said S.K. Goel.
On asking whether the tax department of India are making an allowance for the troubled state of the airline carrier, S.K. Goel stated, “Whatever dues are there, they have to pay there is no question of leeway. They have to turn over whatever service tax they have collected from you and me.”
This leaves Kingfisher with no hope for consideration from the tax authorities of the country. The deadline to make the payment is “as soon as possible”, as stated by S.K. Goel.
The bank account of the airlines were de-frozen by the CBEC and the Income Tax department last month.
The de-freezing of the accounts were followed by a motivating letter by Dr. Vijay Mallya, Chairman of Kingfisher Airlines, to his employees where he wrote, “I am pleased to advise you that the formalities of un-freezing our bank accounts was completed yesterday following our payment of Rs 44 crores to the Income Tax and Rs 20 crores to the Service Tax authorities before March 31st.”
Mallya wrote that his immediate focus would be to pay the dues of the employees.
Last week, the airline had appealed its King Club members to support the airline during its tough times. “I have been overwhelmed with emotion to receive several mails from our King Club members expressing continuing loyalty and wishing that we quickly regain our position as India’s single largest Airline,” Mallya wrote in his letter.
Kingfisher Airlines has not made profits since its inception in 2005. The airlines carrier has suffered losses to the tune of Rs 10.27 billion in 2010-11 and has a debt burden of Rs 70.57 billion on its books.
Till November 2011, the airline carrier used to operate 400 flights per day, which is down to meagre 100 flights now. Nearly, fifty percent of the employees have been asked to “stay at home” in the last one month.
Kingfisher now operates in 28 destinations, down from 56 till November 2011.