The Finance Ministry is likely to extend the deadline for cash-strapped Kingfisher Airlines to repay its service tax dues.
"We cannot kill Kingfisher. We might give KFA some more time, if it pays some dues by March 31," official sources said.
Kingfisher Airlines, which has massively cut down operations and has asked most staffers to stay at home, has agreed to pay only up Rs 10 crore of its Rs 76-crore service tax dues this fiscal.
The service tax department has already frozen as many as 40 bank accounts of the debt-ridden Kingfisher for non-payment of dues worth Rs 76 crore, which also include arrears and interest. Its IATA accounts too have been frozen.
CBEC Chairman SK Goel had earlier said that the revenue department can take Kingfisher to court over alleged service tax evasion, saying the company has not deposited taxes it collected from travellers.
The income tax department too has frozen the carrier's bank accounts for not depositing tax deducted at source.
The airline has a debt of Rs 7,057.08 crore. The financial crunch has hit its operations with dozens of flights being cancelled. Tax authorities have added to its woes by freezing its bank accounts for non-payment of dues.