Saturday , 7 December 2019
Home >> Uncategorized >> Income tax department re-freezes Kingfisher Airline’s bank accounts

Income tax department re-freezes Kingfisher Airline’s bank accounts

The income tax department has frozen two of Kingfisher Airline’s bank accounts for alleged non-payment of dues.

However the airline has clarified in a statement

The IT department attached two of our bank accounts on May 24th which was not in accordance with the speaking order of the Hon’ble IT Appelate tribunal during the hearing.

Subsequently, in a written order of May 25th the tribunal set aside the entire demand made by the IT assessing officer. As such there are no tax dues to be currently paid and the attachment orders on two bank accounts have to be lifted.

So the financially strapped carrier will face a few days of trouble till the income tax department will send a release instruction to the banks, something it is loathe to do.

The airline had an income tax outstanding of about Rs. 370 Crore which is essentially the taxes it withheld from employee salaries as TDS (tax deduction at source), but has not remitted to the department.

In March this year, Kingfisher had withdrawn from the international airline body IATA and took back its deposits of around $8 million. It used these funds to deposit Rs. 44 Crore (approx. $8.8 million at March exchange rates) with the income tax department which caused the Income Tax Tribunal to un-freeze its bank accounts. The airline had also promised to make weekly payment in instalments of Rs. 9 crore.

The airline is now operating on a highly truncated schedule using only 16 aircraft and has dropped from being the second largest domestic carrier in India to the smallest.

The airline also has estimated outstandings of Rs. 40 Crore payable to the service tax department.

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

Check Also

Jet Airways' Boeing 737-800 VT-JBD

Why Jet Airways is critical to Boeing’s India presence

Indian aviation continues to show tremendous aviation potential with growth forecast to be in the …

Spicejet Boeing 737-800 VT-SPL "Cardamom"

SpiceJet Q3FY19 results analysis: challenges remain

SpiceJet, reported its third quarter results of the fiscal year 2018-19 (FY19) this Monday. There …