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Kingfisher Airlines misses deadline, service tax department freezes 40 bank accounts

Forty more bank accounts of the cash strapped Kingfisher Airlines were frozen by the Service Tax Department after it missed the deadline for clearing its dues.

BT Online Bureau   New Delhi     Last Updated: March 5, 2012  | 08:18 IST

Forty more bank accounts of the cash strapped Kingfisher Airlines were frozen by the Service Tax Department on Saturday after it missed the deadline for clearing its dues. The Service Tax Commissioner said Kingfisher Airlines owes Rs 40 crore in tax arrears.

"Over Thursday and Friday, we froze 40 bank accounts of Kingfisher Airlines. They failed to meet the February 29 deadline to make the payments. The airline owes Rs 40 crore to the department," Service Tax Commissioner SK Solanki said.

This is the fourth time in the past four months that the service tax department has frozen its bank accounts. The income tax department had also frozen the bank accounts for not depositing the TDS late last month.

Asked if the airline had communicated with the department, he said, "Not yet as today being a Saturday. We hope to hear from them on Monday."

The move follows as the airline failed to make a Rs 20 crore payment by February 29, as promised. However, Kingfisher spokesperson could not be immediately reached for comments.

The airline was given time till February 29 to clear part payment and March 31 to pay off all the arrears to the tune of Rs 70 crore.

Since the account was frozen first time in early November last, the airline had paid only a little over Rs 30 crore, Solanki said.

It had paid Rs 10 crore in December, after its accounts were frozen in the early that month; Rs 20 crore in January and they had promised to pay Rs 20 crore in February.

Chairman of the Central Board of Excise and Customs, under which the service tax department falls, S K Goel had on February 22 said the airline had to clear this indirect tax dues of Rs 70 crore before March 31.

Earlier in the day, Union Civil Aviation Minister reiterated government's stand on Kingfisher Airlines and said that government can't persuade banks to lend money to bailout the airline.

With PTI inputs

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