Kingfisher Pays Service Taxes For December

January 10, 2012

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India's struggling Kingfisher Airlines has paid INR200 million rupees (USD$3.8 million) in outstanding service taxes due for December, including arrears, a government official said, sending the carrier's shares up more than 9 percent.

The cash-strapped carrier, which is having trouble making interest payments and paying salaries, still owes INR600 million rupees in service taxes, S.K. Goel, chairman of the Central Board of Excise and Customs, told reporters on Tuesday.

Kingfisher, controlled by flamboyant drinks baron Vijay Mallya, has until March to pay the outstanding amount, a spokesman for the finance ministry said.

A Kingfisher spokesman declined to comment.

Last month, Indian tax officials froze several of Kingfisher's bank accounts for failure to pass on to the government the service taxes that are included in ticket prices.

Kingfisher also owes the government about INR1.3 billion rupees of income tax deducted from employee salaries that it has committed to pay by the end of March.

(Reuters)