New Delhi: Civil Aviation Minister Ajit Singh on Tuesday warned cash-strapped Kingfisher Airlines that the company is liable for prosecution over unpaid taxes and the onus to save the carrier is on the airline Chairman Vijay Mallya.
"The banks will decide if they want to risk loans to Kingfisher," said Ajit Singh even as Mallya and Kingfusher CEO Sanjay Aggarwal met the Directorate General of Civil Aviation (DGCA) officials to give their plan for the airline on Tuesday.
The airline has submitted the summer flight schedule and it will be using just 15 to 16 aircraft as against the 28 planes submitted in February.
"Vijay Mallya has to convince DGCA that he is in a position to operate an airline," Singh said.
After the meeting, Mallya said that they have submitted all data to DGCA.
"Our team has gone to Geneva to talk to IATA. It's work in progress," stated Mallya.
There are multiple issues and there is no bailout. "We have to pay high interests and are working with investors," said Mallya.
Mallya said that he is encouraged by the Finance Minister's speech in Parliament on FDI and will have to wait for the FDI. Meanwhile, he added, Kingfisher Airlines will fly with integrity and on schedule.
The government earlier on Tuesday said that State Bank of India (SBI) has not extended any lifeline to Kingfisher Airlines this fiscal.
The crisis-ridden airline has a debt of Rs 7,057.08 crore. The financial crunch has hit its operations with dozens of flights being cancelled. Tax authorities have added to its woes by freezing its bank accounts for non-payment of dues.
The service tax department has already frozen as many as 40 bank accounts of the debt-ridden Kingfisher for non-payment of dues worth Rs 76 crore, which also include arrears and interest. Its IATA accounts too have been frozen.
The Service Tax department can take Kingfisher to court under Section 76 and 78 of the Finance Act. Under the provisions of the Act, the Central Board of Excise and Customs can charge up to 200 per cent of the tax evaded as penalty.
The Income Tax Department, too, froze the carrier's bank accounts for not depositing tax deducted at source.
The beleaguered airline was served a show cause notice by DGCA towards the end of February asking why its licence should not be suspended as it had made unannounced cancellations.
Facing severe fund crunch, Vijay Mallya-promoted airline had decided to curtail its overseas flights operations to avoid further losses and also return of a leased aircraft.