Commissioner of service tax in the Mumbai, SK Solanki said that “Kingfisher paid 90 million rupees ($1.71 million) yesterday toward its service tax dues and has agreed to clear its arrears in installments by March 31.”
The move comes as a much-needed reprieve to billionaire Vijay Mallya’s loss-making Kingfisher Airlines, which lately cancelled dozens of flights and stopped low-fare flights to severely cut costs.
India’s carriers have been strike sternly by expensive jet fuel, high interest costs on debt and mounting losses in a slowing economy. All airlines except one, IndiGo are making losses.
Mr. Solanki said that Kingfisher remaining 700 million rupees in service tax for the April-November period.
The service tax department had preceding week frozen 11 bank accounts of Kingfisher and 10 of state-run Air India Ltd. for non-payment of tax. It raises the freeze on Air India’s accounts Friday after the carrier paid 80 million rupees.