Click to play videoMumbai: After Kingfisher Airlines, Air India's accounts have been frozen for not paying service tax. Air India owes a total of Rs 150 crore in outstanding service tax to the Central Government.
First banks, then vendors and now, the Service Tax Department of the Government, the action against ailing airlines Air India and Kingfisher is coming thick and fast from all sides.
With various partners demanding to be paid, the Central Board of Excise and Customs has frozen bank accounts of the two airlines for non-payment of service tax.
Ten bank accounts of Air India and 11 bank accounts of Kingfisher have been frozen due to non-payment of service tax.
While, Air India owes a total of Rs 150 crore in service tax from April to August, Kingfisher owes Rs 70 crore in service tax for the same period.
This is the third time this year alone that Air India's accounts have been frozen.
Sources from the Service Tax Commissionerate said this time, the accounts will remain frozen, unless Air India and Kingfisher provide concrete proposals for payment, something neither airline has done as yet.
"We will look into the case of Air India," said Minister of Civil Aviation Vyalar Ravi.
For Kingfisher the embarrassment is even more acute as pilots flying Kingfisher are making announcements in flights that they have not been paid two months salary.
Both ailing airlines have made some liability payments for September and October, but service tax payments for four months are still outstanding.
Sources at the Mumbai Service Tax Commissionerate told CNN-IBN they did not want to shut down either airline, but with the amounts involved, had no choice.
With the airline's pilots also unhappy over delayed salaries, it seems the patience of many of the airline's stakeholders are at an end.
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