Tax payment schedule worked out; no a/c frozen: Jet Airways

Jet Airways says it has mutually agreed with tax authorities on a payment schedule for the pending service tax dues.

Jet Airways on Tuesday said it has mutually agreed with tax authorities on a payment schedule for the pending service tax dues.

Denying reports that its bank accounts have been attached, Jet said it will pay Rs 35 crore due in Service Taxes in two days.

"Jet Airways would like to further confirm that as per the mutually accepted payment schedule an amount of Rs 35 crore has already been received by the service tax department, and the balance Rs 35 crore will be paid in full on March 15, 2012," it said in a statement.

The nation's largest private carrier said a "payment schedule has been mutually worked out and accepted together with the tax authorities and at no point in time the airline's accounts have been frozen."

The airline added that the service tax department had been in touch with International Air Transport Association (IATA) with regard to having their proceeds remitted, when the collections are remitted to Jet Airways.

In a statement from Singapore, an IATA official had on Monday said, "the Indian tax authority had served IATA with a garnishment for the amounts owed to the tax authorities by Jet Airways."

Garnishment is a warning served on a third party to hold money or property belonging to a debtor who is being sued or prosecuted by a creditor.

Meanwhile, the Service Tax Department has written to the India office of IATA that Jet Airways has deposited half the amount or Rs 35 crore that was due to it and has assured that the remaining half would be paid by March 15.

The Department had earlier asked IATA to first deduct the payments due to them before settling the Jet account.

IATA's platforms like the IATA Clearing House, Billing and Settlement Plan (BSP) and Cargo Accounts Settlement System (CASS) enable airlines carry out their commercial activities and related monetary transactions with other carriers, agents and aviation organisations.

While the Clearing House deals with airlines making payments for services to other carriers or aviation-related companies, the BSP and the CASS platforms facilitate the sale of tickets and booking of cargo through travel and freight agents.