The Central Board of Excise and Customs (CBEC) has asked cash-strapped Kingfisher Airlines to pay service tax for December by January 5/6 or face action, including freezing of its bank accounts. Kingfisher pays Rs 8-10 crore on average every month as service tax.

“The airline collects service tax from passengers. It cannot keep this in its accounts. Service tax for a month can be paid to the Government by the fifth or sixth of the next month,” Mr S. K. Goel, Chairman, CBEC, told newspersons on the sidelines of an event to launch a new service tax refund scheme for exporters.

He also said that if the airline does not pay by the scheduled date, then the law will take its own course. He did not rule out freezing the airline's bank accounts. Kingfisher and Air India had to face freezing of their bank accounts last month because of unpaid dues. Both the airlines paid up for the month of November and got relief.

The service tax arrears of Air India is nearly Rs 300 crore, while Kingfisher's is around Rs 80 crore.

Customs Duty Collection

Mr Goel also informed that the provisional Customs duty collections in December showed a six per cent growth and touched Rs 12,800 crore. The final details of the overall indirect tax collections (Customs, excise and service tax) will be known by January 8 or 9.

Meanwhile, the CBEC is focusing on recovery of arrears and audits to boost indirect tax collections, Mr Goel added.

Facilitation for Exporters

Earlier, the CBEC chief launched a new scheme, of service tax refund through electronic transfer. This is expected to help exporters get refunds quicker.

An exporter will not be required to file a separate claim and any refund will directly be credited into his account. The exporter, at the time of shipping, will have to declare whether he wants electronic or manual refund.

> Shishir.s@thehindu.co.in

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