Service Tax Dept to auction Mallya jet at low reserve price

New Delhi: A file photo of liquor baron Vijay Mallya who has told the Supreme Court on Wednesday that he is willing to pay up Rs 4,000 crore to the banks by September 2016. Mallya is facing legal proceedings for allegedly defaulting loans of over Rs 9,000 crores from various banks. PTI Photo (PTI3_30_2016_000276B)

Having failed to get good valuation in the first attempt to auction the personal luxury plane of beleaguered businessman Vijay Mallya last week, the Service Tax Department is gearing up for the second attempt with a lower reserve price for bidders.

Sources said however that a final decision on valuation will be taken by the department’s joint pricing committee.

On June 30, the department had rejected the sole bid of Rs. 1.09 crore offered by the United Arab Emirates-based aviation support firm Alna Aero Distributional Finance Holdings, against a reserve price of Rs. 152 crore.

“The department is gearing up to go in for a fresh round of auction of the personal jet of Mr. Mallya in its bid to recover dues amounting to over Rs. 800 crore with a lower reserve price,” a Service Tax Department official told PTI today.

“The Bombay High Court has given its nod to go in for a second round of auction which is likely to be held on August 21,” the source said.

According to the official, the department may consider bringing down its reserve price this time so as to attract more bidders.

“The department is considering to lower the reserve price to attract more bidders. But a decision on this will be taken by the joint pricing committee of the department which may happen within 10 days,” the source said.

The UAE company had deposited the earnest money of Rs. 1 crore as per auction conducted by the department’s official auctioneer, MSTC.

The plane was attached by the Service Tax Department in December 2013.