India | Updated Dec 08, 2011 at 01:46pm IST

AI fails to pay service tax, accounts frozen

Raksha Shetty, CNN-IBN

New Delhi: Air India's bank accounts have been frozen for not paying service tax. Sources say that the airline's accounts have been frozen by the Central Board of tax authorities for avoiding payment of service tax.

The airline has to reportedly pay Rs 100 crore to clear the service tax.

Sources add that Air India says the company will make some payment on Thursday, after which accounts will be de-freezed.

"I don't have any information so far. I will ask for it. We will sort it out," said Civil Aviation Minister Vayalar Ravi.

Kingfisher Airlines accounts, too, may have been frozen for the same reason.

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