Service tax dept seeks IATA's help to recover dues from Jet Airways

The service tax department has written to the global airlines’ body, International Air Transport Association (IATA), to help recover Rs 69 crore dues from Jet Airways. The department initiated the action after the airline failed to make the tax payments on time.

IATA’s billing settlement plan (BSP) acts as a payment gateway for travel agents. Remittances for ticket sales are made to the airline through BSP each month. Aviation sources said the service tax department had sent a notice to the IATA BSP to deduct service tax from the amount payable to Jet Airways on account of ticket sales. This is for the first time that the service tax department is seeking IATA’s help to recover its tax dues. Last week, the department had served a notice to the airline, demanding payment of dues.

In a statement, a Jet Airways spokesperson said, “The service tax department has been in touch with IATA with regard to having their proceeds remitted when the collections are remitted to Jet Airways. Therefore, it is incorrect and misleading to say the airline’s accounts have been frozen. No bank account of Jet Airways has been frozen or attached.”

Last week, Jet Airways said service tax dues of Rs 35 crore for January will be paid on March 12 and Rs 35 crore for February on March 15. “The company has been regular in meeting and discharging all its statutory obligations,” the airline said.