KFA will lose planes if dues not cleared, says tax dept

Written by fe Bureau | New Delhi | Updated: Jan 12 2013, 08:29am hrs
The governments service tax department has served a notice on cash-strapped Kingfisher Airlines threatening to impound all aircraft unless it clears dues of up to Rs 190 crore.

Media reports had earlier suggested the tax authorities had impounded all the aircraft but Kingfisher clarified saying that only two planes have been impounded.

We categorically state that the service tax department has not impounded any aircraft except an Airbus A320 passenger jet with registration number VT-DNZ and an ATR 72-500 (VT-KAR), a statement from the airline said.

The tax authorities had sent the notice about two weeks ago, sources in the know of the development said. As per notice, the airline cannot fly the planes outside the registered airport premises. Meanwhile, a senior DGCA official said on Friday that Kingfisher revival plan is not enough to restart operations.

There are a lot of issues regarding lenders, staff payment which we felt may not lead to reliable services, said the official, who declined to be named. The plan has no provision for airport dues. There should be no inconvenience to passengers.

On Thursday, Kingfisher Airlines chairman Vijay Mallya wrote to his employees saying that he plans to resume operations by summer of 2013 and said that the airlines parent UB Group will inject Rs 650 crore into the airline to restart operations.

While Mallya listed out the plan to revive the airline, no mention was made of potential investors or when the employees salaries would be cleared.