Service tax office to auction Mallya’s jet plane on March 15-16

Mumbai, Jan 30:

The Indian Service Tax Department will auction absconding industrialist Vijay Mallya-led Kingfisher Airlines’ corporate jet in March to recover dues of Rs 535 crore, the department has announced here.

The department’s Mumbai office has invited online bids for sale of the Kingfisher Airlines Airbus A319 corporate jet, which had earlier been attached by it, and is parked at Mumbai Airport.

As per the auction notice, the bidding will be conducted by state-run MSTC on March 15-16.

Bidders can seek clarification from the department regarding the aircraft, its particulars, equipment and any related documents at least 24 hours before the submission of bids in the e-auction.

“The bidder will not raise any dispute regarding the terms and conditions of the e-auction or about the particulars of the aircraft or contest the same once he has been declared as the successful bidder for the aircraft,” the e-auction guidelines said.

The prospective bidders are required to submit interest free pre-bid Earnest Money Deposit (EMD) to MSTC by March 14. EMD for Indian bidders has been kept at Rs 50 lakh, while for foreign bidders it is $75,000.

The department in a petition to the Bombay High Court in March last year had claimed that Mallya had collected a large sum of money as service tax from flyers of Kingfisher Airlines on behalf of the government, but the collection was not deposited in the government treasury.

Kingfisher Airlines owes around Rs 9,000 crore to a consortium of 17 banks.

The liquor baron left the country in March and is currently said to be living in Britain.

Last month, a State Bank of India (SBI)-led consortium’s attempt to auction the Kingfisher House here, once corporate office of the defunct airlines, failed for the third time as there were no takers despite a 15 per cent cut in reserve price.

Similarly, the consortium’s attempt to auction the Kingfisher Villa in Goa, failed in December for the second time. Kingfisher Villa, owned by United Breweries Holdings (UBHL), was mortgaged as collateral for loans to Kingfisher Airlines.

Earlier this month, the Debt Recovery Tribunal in Bengaluru ordered the recovery of Rs 6,203 crore along with interest from Mallya’s properties for defaulting on bank loans by Kingfisher Airlines.

Last week, India’s market regulator Sebi barred Mallya from trading in the securities market for allegedly diverting funds from United Spirits Ltd in his capacity as its Chairman.

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