Air India clearing service tax dues

Mumbai: The crisis-ridden Air India on Thursday said it is making service tax payments, after tax authorities froze its bank accounts for dues of over Rs 300 crore. "We are making on-account payments and having the bank accounts released," an AI official told PTI late in the Thursday evening.

This is the second time in two months that Central Board of Excise and Customs Department has acted against AI. In December, the department had frozen as many as 11 accounts of AI, and 10 of the private carrier Kingfisher.

The development came even as bankers reportedly met on Thursday to consider a fresh CDR proposal for the debt-laden national carrier. "We have frozen 11 bank accounts of Air India as they have not made any payment after the part-payments done last month," a senior official of CBEC said earlier in the day. "After the Rs 8 crore payment AI made last month, nothing has been paid."

Earlier this week, CBEC chairman S K Goel had said Kingfisher Airlines and Air India owed the government a total of over Rs 360 crore towards service tax.

AI is seeking an equity infusion of Rs 6,600 crore from government that will enable it to pay interest on fleet acquisition and to meet other expenses including salaries to employees for the past two months and allowances for the past five months.