Kingfisher gets service tax relief; Air India goes free

Cash-strapped Kingfisher Airlines earned some relief from the finance ministry on its service tax dues of Rs60 crore after it paid part of the outstanding amount. The Central Board of Excise and Customs on Tuesday gave it till March to clear the dues after Kingfisher paid up Rs20 crore, clearing its dues for December 2011 and part of the built-up arrears.

Notably, state-owned Air India is deeper in the taxman's bad books than even the struggling Kingfisher. The CBEC has warned the national carrier that its accounts will be frozen unless it pays a ''reasonable'' part of its service tax dues soon.

CBEC chairman S K Goel said Kingfisher Airlines paid Rs10 crore in December and another installment of Rs10 crore in January 2012, clearing its dues for December 2011 and part of the arrears built up earlier.

On the other hand, Air India is the biggest defaulter with service tax dues of Rs300 crore, of which it has only paid Rs10 crore and had made no commitment of any further payments, Goel said.

"Air India has said it will clear up arrears only after the government infuses fresh equity in the official airline," Goel said. Nonetheless the department is not contemplating any action against Air India as it has done in case of Kingfisher, he added.

''We have sent a letter to Air India on Tuesday asking them to pay more. They have paid Rs10 crore for the month of December but we think the amount could be more,'' Goel said.