Mallya's aircraft: Service tax department to auction in Nov, to recover dues of Rs 535 cr

The Service Tax Department will next month auction liquor baron Vijay Mallya's corporate jet of the now-defunct Kingfisher Airlines to recover dues of Rs 535 crore.

The department in Mumbai has invited online global bids for sale of Corporate Jet Airbus A319 stationed at the Mumbai International Airport belonging to Kingfisher Airlines which has already been attached by it.

The bidding will be conducted by MSTC, the selling agent of the Service Tax Department, on November 28-29, an auction notice said.

As part of the pre-bid verification, bidders can seek clarification from the department regarding the aircraft, its particulars, equipment and any related documents.

"The bidder would not raise any dispute regarding the terms and conditions of the e-auction or about the particulars of the aircraft or contest the same once he has been declared as the successful bidder for the aircraft," said the guidelines for the e-auction.

The prospective bidders shall have to submit interest free pre-Bid Earnest Money Deposit (EMD) to MSTC by November 27. EMD for Indian bidders has been kept at Rs 1 crore while it will be $1,52,000 for foreign players.

In March, the department had claimed in a petition to the Bombay High Court that Mallya's total disputed liability in respect of service tax was to the tune of Rs 535 crore.

It was also claimed that Mallya had collected a large sum of money as service tax from flyers of the now-grounded Kingfisher Airlines on behalf of the government, but the same was not deposited in the government treasury.

Mallya, whose group company owes over Rs 9,000 crore to 17 banks, had left the country on March 2 and is believed to be in the UK.

In August this year, lenders to the now-grounded airline and tax authorities had put under the hammer various movable and immovable assets of KFA for the second time, but failed to get any buyers.