Revenue dept to take legal action against KFA to recover dues

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The revenue department on Wednesday threatened to take legal action against the ailing Kingfisher Airlines (KFA) to recover service tax dues.

"We will take all required legal action, whether it is KFA or anybody else. They have committed an offence. They will be taken to task for that...That exercise is on. The action is in process," Central Board of Excise and Customs (CBEC) Chairman S.K. Goel told reporters here.

Promoted by liquor baron Vijay Mallya, Kingfisher Airlines has run into a debt of Rs 7,500 crore and has not been paying service tax. Under the current norms, airlines are required to collect service tax from passengers and deposit it with the government.

Goel had earlier said that Kingfisher had collected the service tax but did not pay to the government. The service tax department had earlier frozen various accounts of the airlines following its failure to clear dues.

The revenue department, Goel told reporters, would first issue a show-cause notice to Kingfisher giving it opportunity to pay tax dues along with penalty. "... whatever reply they will give, depending on that, an order will be issued asking them to pay a determined amount of penalty.

The second (action) is that we (will) take them to the court of law," he added. On when the CBEC was like to take legal action against the KFA, Goel said, "We have not fixed a date on sending notice. We have to work out the legal requirements. We are working on it...It requires lot of evidences."

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.