Kingfisher Airlines pays Rs 44 cr to income tax department
The move to clear dues is likely to work in Kingfisher Chairman Vijay Mallya's favour as the report, among other things, would also take into account Kingfisher's ability to pay off tax dues.
Kingfisher Airlines, the troubled carrier, has made a payment of Rs 44 crore to the Income Tax Department, sources told NDTV.
The Income Tax Appellate Tribunal in Bangalore had given Kingfisher time till Monday to make the payment.
This was a condition set by the Tribunal to unfreeze company’s bank accounts by the tax department. Kingfisher owed Rs 370 crore to the tax department on account of tax deducted at source or TDS from employees. Each month employers deduct TDS and pay the government. Kingfisher deducted TDS but did not pay the government. The company has to make a weekly payment of Rs 9 crore beginning next week to the tax department, according to conditions set.
This could come as a major relief for the airline ahead of the Directorate General of Civil Aviation’s (DGCA) report on its viability to be submitted to the Ministry of Civil Aviation.
It is still unclear though when the airline regulator would submit their report to the Civil Aviation Ministry. The move to clear dues is likely to work in Kingfisher Chairman Vijay Mallya's favour as the report, among other things, would also take into account Kingfisher's ability to pay off tax dues.
Last week, Kingfisher chairman Vijay Mallya submitted a "holding" plan to the DGCA that entailed flying an abbreviated schedule with just 20 planes - less than a third of its former more than 60-strong fleet - and cancelled all international flights.
Moreover, the airline is reported to have almost shut down 25 centres.
These include Hyderabad, Kolkata, Lucknow, Ahmedabad, Ranchi, Patna, Amritsar, Bhubaneswar, Indore, Kochi, Nagpur, Coimbatore, Bagdogra, Trivandrum and Kochi, company executives told NDTV Profit. They declined to be named because of the sensitivity of the matter.
The company is likely to inform its 7,000-strong workforce about these closures in a day or two, following which some of them will be asked to go on so-called ‘leave without pay’, they said, adding that, eventually, nearly 50 per cent of employees may be asked to go.
The ‘leave without pay’ route will absolve the airline of having to pay employees the severance they are entitled to. In any case, Kingfisher has not been able to pay employee salaries for up to three months. It has also not passed on the tax deducted at source or TDS from their payrolls to the Income Tax department. The tax authorities subsequently froze the carrier’s bank accounts.
Shares of Kingfisher Airlines plunged over 6 per cent on the Bombay Stock Exchange.
