Kingfisher crisis: Govt warns Vijay Mallya to pay airline’s dues

 Civil Aviation Minister Ajit Singh on today issued a warning to Kingfisher Airlines Chairman Vijay Mallya to pay the airline’s dues in order to continue its operations.

The warning came just hours before the Directorate General of Civil Aviation (DGCA) comes out with its report on the cash-strapped private carrier.

Speaking to a news channel, Singh said that the aviation watchdog will call Mallya again to ensure that safety and passenger convenience is not being compromised.

He said as long as the airline adheres to its schedules and flying norms, it can continue to fly.

Singh said, “As far as rules are concerned, if any airline has five planes and the required amount of equity then it can continue to fly. However, if Kingfisher keeps changing its schedule without informing the DGCA or the passengers, does not pay the oil companies or the Airport Authority of India, the airline might not continue operations.”

On Sunday, the cash-strapped airline had agreed to pay only up to Rs 10 crore of its Rs 76-crore service tax dues this fiscal, a top government official said.

S K Goel , the CBEC Chairman said that as per their talks, the Vijay Mallya-promoted airline will pay only Rs 5 to 10 crore of its dues before the end of the fiscal but the private carrier should not worry about any immediate penal action.

He said the Service Tax department has been freezing Kingfisher's bank accounts since October due to the non-payment. As of now it has frozen as many as 40 accounts.

The department will de-freeze some accounts to facilitate the payment of the remaining dues, Goel said, without giving a number.

On the penal action which the department threatened last week, the CBEC chief pointed to a legal provision wherein a defaulter can take up to 12 months to pay the dues.

But once the deadline is crossed, the department will exercise its legal options, Goel added.

The airline, which has a debt of Rs 7,000 crore and an accumulated loss of over Rs 6,000 crore, has been operating only 16 of its 64 aircraft since last month and has quit Kolkata and Hyderabad routes completely.

It also wound up international operations last week.

The DGCA and the Aviation Ministry have threatened to cancel the 7-year-old airline's licence if it fails to come up with an operational schedule this week.