Service tax dept impounds KFA flight for defaulting on dues

Mumbai’s service tax department today impounded a grounded Kingfisher aircraft for defaulting on tax dues amounting to Rs 63 crore. While one aircraft has been seized , another is in the process of detention.

“We have seized one ATR aircraft of the Kingfisher as the carrier has failed to clear our dues,” Mumbai Service Tax Commissioner S K Solanki was quoted as saying.

The Deputy Commissioner, Service Tax had sent an order a few days back to Kingfisher that seven aircraft of the airline in Mumbai will be impounded as the airline has defaulted on service tax dues of Rs 200 crore.

The airline today said it has received a notice from the service tax department to which it has already responded. “Since the aircraft is taken by Kingfisher purely on operating lease basis and the airline is only a lessee of the aircraft (not the owner), it does not feature as an asset in the books of accounts of Kingfisher,” the airline said.

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[caption id=“attachment_553033” align=“alignleft” width=“380”]  Mumbai International Airport Ltd (MIAL) has seized seven Kingfisher Airlines (KFA) aircraft for non-payment of airport dues[/caption]

The cash-strapped airline has also received an eviction notice from the Mumbai airport for Rs 50 crore dues towards parking and navigational charges.

Until the long-pending dues are cleared, we shall not let them fly these aircraft, which are in our control," a Mumbai International Airport Ltd (MIAL) official told IANS. He said the huge space occupied by KFA aircraft could have been better and productively utilised, especially since Mumbai airport was severely short of open space.

Discussions are already under way with other private carriers to allocate them the space but a final decision on the matter is pending till KFA clears the dues.

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“We have yet to hear from Kingfisher Airlines on our notice. They were given seven days’ time to clear our dues and so far neither they have responded to the notice nor have made any payment,” sources said told PTI earlier this month.

KFA has been grounded since Oct 1 due to financial and labour problems. Later that month, its flying licence was also suspended by the Directorate General of Civil Aviation. In view of the resource crunch, KFA has failed to clear its airport dues for the past few months.

Kingfisher Airlines owes over Rs 1,000 crore in vendor and tax arrears.

With inputs from IANS