The revenue department has threatened to take Kingfisher Airlines to court over alleged service tax evasion, saying the company has not deposited taxes it collected from travellers.
“They (Kingfisher) have to face the court... Evasion has already taken place...They can even be jailed,” Central Board of Excise and Customs (CBEC) Chairman S K Goel told reporters in New Delhi.
He was replying to a question on whether Kingfisher has to face the court even if it deposits the tax 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.
“Now there are two things — We have to recover that (dues) and secondly whatever punishment has to be given (by court),” Mr. Goel added.
The airline had informed CBEC that it would pay the dues by March 31, 2012.
Mr. Goel said Kingfisher had collected the service tax at the rate of 10 per cent from its passengers, but did not pay to the government.
“So it is an evasion. For evasion there is a criminal liability under which courts are empowered to take action once it is proved that they have evaded tax. That action will be taken,” he said.
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 CBEC can charge up to 200 per cent of the tax evaded as penalty.
The income tax department too frozen the carrier’s bank accounts for not depositing tax deducted at source.
The 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.