11 accounts of Air India and 10 accounts of Kingfisher Airlines were frozen by the Service Tax Department. This was done in view of default on service tax payments.
According to the Commissioner of Service Tax in Mumbai, Air India owes Rs. 150 crore while Kingfisher owes Rs. 70 crore. The commissioner further alleged that both had defaulted in paying in the money that they had already collected in the name of service tax from their customers.
Both companies are already badly debt-ridden.
It is reported that Vijay Mallya the liquor baron and promoter of Kingfisher Airlines, may be trying to sell Kingfisher House to raise funds, whereas the government owned Air India is expecting the Government of India to cough up the funds to enable it to survive.
The debt of Kingfisher is a whopping 12,000 crore, while Air India is sitting on a even bigger debt of 62,000 crore.