Jet Airways, which is having problems of cash crunch, was, on Monday, jolted by a Service Tax department directive to global airlines body IATA (International Air Transport Association) to pay the carrier's tax dues of about Rs.69 crore.

The IATA was sent an advisory by the department to remit the tax dues of Jet to the department before settling the bills of the airline, IATA sources said.

CBEC officials confirmed that the Service Tax Department had sent such a directive. The department, which had sent a notice last Friday to Jet Airways cautioning the airline that its accounts would be frozen if it fails to clear the service tax by Monday.

Rs. 69 crore dues

The service tax payment was due since March 6. Jet had then said it would clear the dues by Monday.

Confirming the action against them, a Jet spokesperson said on Monday, “the Service Tax Department has been in touch with the IATA with regards to having their proceeds remitted when the collections are remitted to Jet Airways.''

The spokesperson said “no bank account of the airline has been frozen or attached.”

The IATA maintains accounts to enable airlines transact business with their counterparts, travel and cargo agents and other vendors, both in the domestic and international markets.

The Service Tax Department's action implies that the IATA would first deduct the payments due to the Department before settling the Jet account. In a statement from Singapore, an IATA official said, “the Indian tax authority had served the IATA with a garnishment for the amounts owed to the tax authorities by Jet Airways.” — PTI

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