CBEC freezes Kingfisher Airlines bank accounts for failure to pay service tax

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New Delhi, Feb 24, 2012: The Central Board of Excise and Customs (CBEC) today said that it has frozen the bank accounts of Kingfisher Airlines for its failure to pay service tax arrears.

"They were paying Rs 1 crore per day. For past few days there has been an interruption. They have not been able to pay, so we have frozen their accounts 2-3 days ago by issuing a letter to the bank," CBEC Chairman S K Goel told reporters.

The airlines, he further said, had an outstanding indirect tax arrears of Rs 70 crore and about Rs 35 crore is still due from them.

Promoted by liquor baron Vijay Mallya, Kingfisher Airlines has run into financial problems and has suffered losses of over Rs 1,000 crore during the nine-month period ending December 2011.

A consortium of 18 bankers including 14 state-owned lenders and four private banks have provide huge sums to the beleaguered airlines which has a total debt of about Rs 7,057 crore and accumulated losses of about Rs 6,000 crore.

In view of the precarious financial position, the airlines is finding it difficult to procure fresh funds from the banks.

The bankers have been insisting they would not pump in money unless the promoters infused fresh equity into the company.

Courtesy: Deccan Herald