Kingfisher owes to govt Rs 269 cr Income Tax

Vijay Mallya-promoted Kingfisher Airlines owes Rs 269.06 crore (Rs 2.69 billion) Income Tax and I-T Department has initiated penalty and prosecution proceedings against the private carrier, government informed the Lok Sabha on Friday.

Kingfisher Airlines was found to have deducted tax at source on salary payments but had not deposited it in government account, Minister of State for Finance S S Palanimanickam said in a written reply.

"Survey. . .was conducted at the business premises of the aforesaid company and subsequently tax demand (including interest) amounting to Rs 372.09 crore (Rs 3.72 billion) pertaining to FYs 2009-10 to 2011-12 were raised," he said.

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"Action for recovering has been undertaken and a total of Rs 103.03 crore (Rs 1.03 billion) has already been recovered.

"Penalty and prosecution proceedings under the Income-tax Act have also been initiated," Palanimanickam said.

He said in case of Employees State Insurance Corporation, an amount of Rs 23.42 lakh (Rs 2.34 million) is outstanding against the Bengaluru unit of Kingfisher Airlines towards 'interest and damages', for which recovery action has been taken.

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The matter is pending in a court, he said.

The minister said proceedings under Employees' Provident Funds and Miscellaneous Provisions Act, 1952, have been initiated against Spice Jet Ltd for assessment of dues from November 2008 to January 2012.

To another question, Minister of State for Finance Namo Narain Meena said as on September, 2011, exposure of public sector banks to private airlines was Rs 15,700 crore (Rs 157 billion).

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"Out of this, about Rs 14,500 crore (Rs 145 billion) was outstanding," he said, adding banks obtain various tangible and intangible securities from borrowers.

Meena said the Reserve Bank of India has not issued any specific guidelines to banks for providing loan to private airline companies.

Credit related matters have been deregulated by Reserve Bank of India and banks are free to take their decision in the matters of loan eligibility based on their commercial judgement and in accordance with their policy framed within the overall framework of RBI, he added.