Kingfisher asked to pay Rs60 crore service tax

Cash-strapped Kingfisher Airlines has been asked to pay Rs60 crore which it owes as service tax, according to a senior finance ministry official.

S K Goel, chairman, Central Board of Excise and Customs, said the airline had been asked to pay the amount and no concessions would be provided to the carrier.

Goel told reporters in New Delhi that there was no question of leeway to Kingfisher on payment of service tax.

The department had earlier, for the fourth time in four months frozen 40 bank accounts of the airline for failure to meet the 29 February deadline for clearing its dues of Rs40 crore it owed to the department.

On 2 April Kingfisher Airlines chairman Vijay Mallya had written to the airline's staff informing them that the company would be able to pay their overdue salaries as its bank accounts had been un-frozen following payments worth Rs44 crore to the income tax department and Rs20 crore as service tax.

"All junior staff will be paid before Easter. All pilots and engineers will be paid April 9 and 10," he wrote. "My focus now is to start paying your seriously overdue salaries."