Service Tax dept may re-auction Vijay Mallya's luxury jet after a lacklustre bid offer

The highest bid received during the auction was a measly Rs 27 crore against the reserve price of Rs 152 crore

PTI August 19, 2016 18:40:35 IST
Service Tax dept may re-auction Vijay Mallya's luxury jet after a lacklustre bid offer

Mumbai: The Service Tax Department may go for another round of bidding for luxury jet of embattled businessman Vijay Mallya as the highest bid received during the auction here was a measly Rs 27 crore against the reserve price of Rs 152 crore.

"The department may go for fresh round of bidding for the jet through its official auctioneer MSTC after rejecting this offer," a department official said Friday.

Service Tax dept may reauction Vijay Mallyas luxury jet after a lacklustre bid offer

Vijay Mallya. AFP

Yesterday, the highest bid amount (of Rs 27 crore) was offered by a domestic firm SGI Commex. The only other bidder which participated in the auction was a UAE-based aviation support firm Alna Aero Distributional Finance Holdings, which last time had made an offer of Rs 1.09 crore for the jet.

The previous auction, which was conducted by the department on 30 June, had proved to be a damp squib as the UAE-based lone bidder had made a paltry offer of less than a percent of the reserve price.

The plane was attached by the Service Tax Department in December 2013, claiming tax dues of over Rs 800 crore from Mallya's now-defunct Kingfisher Airlines.

"We are still not happy at the highest bid amount (Rs 27 crore) offered by SGI Commex. Hence, we may reject the offer and go for fresh round of auction for the jet in our bid to recover the dues. However, a final call will be taken by the department within a couple of days from now," the official said.

Earlier, the joint pricing committee, which comprises five members, including one additional commissioner of the department and officials from the Directorate General of Central Excise Intelligence, met to discuss if the reserve price could be lowered.

However, the committee felt that the reserve price at Rs 152 crore was good enough, keeping in view the value of the goods involved in the jet, the official added.

Also, the lenders' attempt to sell the Kingfisher House in the city for Rs 150 crore and the Kingfisher brands for Rs 367 crore earlier this year had failed as no bidders turned up.

The beleaguered tycoon owes over Rs 9,000 crore, which includes unpaid loans and accrued interest, to 17 banks.

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