The Central Board of Excise & Customs (CBEC) on Friday said it has again attached the bank accounts of Kingfisher Airlines after it failed to make regular payments of its arrears. The troubled airline’s discussions with the Central Board of Direct Taxes (CBDT) to de-freeze the accounts also failed.
CBEC Chairman S K Goel said Kingfisher was to pay Rs 1 crore everyday to clear its indirect tax dues with the department, but there were some interruptions in the last 2-3 days, following which the CBEC issued a letter to its banks instructing them to freeze Kingfisher’s accounts.
“They were paying Rs 1 crore per day. For past few days there has been an interruption. They have not been able to pay, so we have frozen their accounts,” Goel told reporters.
In December 2001, the service tax department had frozen the bank accounts of Kingfisher, but de-froze it later after the air carrier made part-payment of their service tax dues. Kingfisher owed Rs 70 crore to the service tax department, of which about Rs 35 crore is still due.
On the other hand, the Income Tax (I-T) department also refused to de-freeze the accounts of Kingfisher until the carrier agreed for a partial up-front payment of about 40 crore and pay the balance amount in installments over the next few months. Earlier this week, Kingfisher, promoted by liquor baron Vijay Mallya, had appealed to the department to allow it make payments over 18 months on a weekly basis.
Finance ministry officials said Kingfisher owed about Rs 300 crore to the I-T department since it had not deposited with the government the TDS (tax deducted at source) deducted from employees’ salary in the last two years. The amount included penalty and interest payment.
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The amount of liabilities quantified on preliminary examination was Rs 53.82 crore for 2010-11 and Rs 100 crore for 2011-12. Of the total amount of Rs 153.82 crore, the tax department collected Rs 21.04 crore till December 2011. Kingfisher filed a commitment letter to pay balance Rs 130 crore TDS liabilities by the end of the current financial year.
In a statement on February 20, Kingfisher had said the prime reason for disruptions in its flight recently was due to “the sudden attachment” of its bank accounts by the I-T department. It said the freezing severely affected its ability to make operational payments.