Vijay Mallya's luxury jet to be re-auctioned at a lower reserve price on Aug 18

Having failed to get a good valuation in the first attempt to auction the luxury jet of embattled businessman Vijay Mallya last month, the service tax department will re-auction it on August 18, possibly at a lower reserve price. The earlier attempt at its auction had received a bid of Rs 1.09 crore as against the then reserve price of Rs 152 crore. [caption id=“attachment_2664728” align=“alignleft” width=“380”]  Vijay Mallya. Reuters[/caption] The result of the e-auction, which will be conducted by the department’s auctioneer MSTC, will be out on the same day evening, a service tax department official said on Thursday. 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, is yet to take a decision on lowering the reserve price. The committee has to decide the reserve price at least two days before auction. On 30 June, the department had rejected the sole bid of Rs 1.09 crore offered by the United Arab Emirates-based aviation support firm Alna Aero Distributional Finance Holdings, against a reserve price of Rs 152 crore. “The department will go in for a fresh round of auction of the personal jet of Mallya to recover the dues amounting to around Rs 1,000 crore,” the official said. The department has already taken opinions from two valuers so far on the value of the luxury jet. One of them is Ceejay Leasing, the US-based firm which had supplied the luxury aircraft to Mallya, who has been absconding court orders and other regulators and investigating agencies since early March. The department had on 25 July held a meeting wherein everyone concerned was requested to make the forthcoming auction a success. The meeting was attended by officials from the MSTC, Mumbai airport, Ceejay Leasing and the legal consultants, the city-based AZB Partners. One of the advices which came up during the meeting was that the reserve price of the plane must be realistic, the official said. Another opinion was that as per the global practise, such sales must be held on a mutual negotiation basis. But this was rejected by the department on the ground that there was no such provision in the department’s manual, the official added.