Revenue Dept freezes accounts of Jet Airways

Jet Airways has not paid a total of about Rs 69 crore worth of dues for January and February which they collected during that period.

FP Staff December 20, 2014 06:58:44 IST
Revenue Dept freezes accounts of Jet Airways

Is Jet Airways on its way to becoming another Kingfisher?

The revenue department froze the accounts of the airline on Monday, as it has failed to pay its service tax.

Jet Airways has not paid a total of about Rs 69 crore worth of dues for January and February which they collected during that period, official sources had said on Saturday.

"We have frozen the IATA accounts of Jet Airways for delay in payment of service tax dues worth Rs 69 crore for months of January and February," a Finance Ministry source

said.

The Revenue Department had sent a notice on last Friday to Jet Airways cautioning the airline that its accounts would be frozen if it fails to to clear the service tax.

Revenue Dept freezes accounts of Jet Airways

Reuters

Cash-strapped Jet Airways had said earlier it will clear its tax dues on Monday, after the Central Board of Excise and Customs reportedly warned India's largest private airline that its bank accounts will be frozen if it does not clear outstanding dues of about Rs 69 crore.

But, it has failed to do so.

"They have 24 hours to make the payment, failing which their accounts will be frozen," SK Goel, chairman of the Central Board of Excise and Customs, was quoted by the Business Standard newspaper as saying on Sunday.

The airline made a statement in which it denied having received any such warning, but said it plans to pay the amount by Monday.

A Jet spokesperson said "the Service Tax Department has been in touch with IATA with regards to having their proceeds remitted when the collections are remitted to Jet Airways".

The spokesperson said "no bank account of the airline have been frozen or attached."

India's airlines are reeling under a $20 billion debt load and are struggling to make profits, hurt by higher fuel prices, competition and low fares. Five out of India's six scheduled carriers are making losses.

Jet Airways posted a loss of Rs 101.22 crore in the third quarter ending December 31 last year, as higher fuel prices, lower fares and rupee depreciation continued to hurt the company. In the corresponding quarter the previous year, the company had posted a net profit of Rs 118.23 crore.

However, its total income increased to Rs 3,939.16 crore for the quarter as against Rs 3,473.38 crore recorded during the same quarter of the previous year.

The tax authorities have frozen a large number of bank accounts of Kingfisher squeezing its finances, even as the IATA has suspended it for non-payment of dues from three of its crucial platforms, including those connected with its ticket sales and cargo bookings.

With inputs from PTI

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