Aviation Crisis: After taxmen's threat, Jet Airways to pay dues
March, 12th 2012
Jet Airways on Saturday said it will pay dues to the service tax authorities, after they warned that its accounts could be attached.
Jet is said to owe 60 crore as dues to the tax authorities, according to two officials at the Excise Commissioner's office, which administers the service tax. Jet has not paid taxes for January and February. The service tax is to be deposited on the sixth of every month.
A Jet spokesperson said in a response to an ET query, "Service tax dues for January 2012 of 35 crore will be paid to the Authorities on 12 March 2012 and February 2012 service tax dues of 35 Crore will be paid on 15th March 2012".
"There is no truth in the statements made to certain sections of the media regarding attaching / freezing any of the Company's Bank Accounts... the company has generally been regular in meeting and discharging all its statutory obligations ," the spokesperson said.
Jet Airways is the second airline to be in the news for a default on tax dues in the current volatile market situation. The tax authorities have already frozen 42 accounts of Vijay Mallya-promoted Kingfisher Airlines. The Service Tax Rules empower the officials to issue such directions to a body or a person who holds income on behalf of a defaulter.
A service tax official said they expect the airline to pay the tax dues early next week. A delay attracts interest at one percent a month with penalty in some other cases as well. Jet Airways, however, in a reply to an ETquery said that the information is not correct.
Aviation experts say that Jet is now in a phase where the sectoral strains are catching up with it. Jet has a debt burden of 13,900 crore and has accumulated losses of over 1500 crore. The airline is also seeking to get help from the banks to raise working capital loan.