Govt warns KFA on service tax dues

The revenue department on Wednesday said the ailing Kingfisher Airlines (KFA) owed nearly Rs 50 crore in service tax, which if they wouldn't pay, they would be dealt with legally.

'We will take all required legal action, whether it is KFA or anybody else. They have committed an offence. They will be taken to task for that... That exercise is on. The action is in process,' said Central Board of Excise and Customs (CBEC) Chairman S K  Goel during a press conference in Delhi.

Promoted by liquor baron Vijay Mallya, KFA has run into a debt of Rs 7,500 crore and had not been paying the service tax. Under the current norms, airlines were required to collect service tax from passengers and deposit it with the government.

Goel had earlier said that KFA had collected the service tax from passengers, but did not pay the government. The service tax department had earlier frozen various accounts of the KFA following its failure to clear dues.

'Recently, they paid us Rs 50 crore. However, still the tax is due and they have to give it to us,' said Goel.

The revenue department, Goel told reporters, would first issue a show-cause notice to Kingfisher giving it an opportunity to pay tax dues along with penalty and as per their reply, an order would be issued asking them to pay a determined amount.

'The second action is that we will take them to the court of law,' he added. On being asked when CBEC was likely to take legal action against the KFA, Goel said, 'We have not fixed a date for sending the notice. We have to work out the legal requirements. We are working on it... It requires a lot of evidences.'
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