Tax department issues show-cause notice to SpiceJet for non-payment of GST dues

Forum Gandhi Mumbai | Updated on August 12, 2021

Airline files plea in Chandigarh High Court

The tax department has served a notice to SpiceJet for non-payment of GST dues asking the airline to pay ₹80.68 crore with interest as dues between February 2020 and June 2021. SpiceJet has filed a writ petition in the Chandigarh High Court against the notice.

According to sources, SpiceJet had requested to make the payments in installments. It had also asked the tax department if the dues could be adjusted against possible refunds owed by the GST department to the airline.

However, these requests were declined. Instead, the GST department threatened recovery proceedings under Section 79 of the CGST and HGST Act, 2017. It had also asked the debt-strapped carrier to submit details of all the bank accounts along with movable and immovable assets of the airline.

In its submission to the court, SpiceJet said it admits to the tax liabilities; however, it does not have funds to discharge its GST liabilities in view of the adverse impact of Covid-19 on the aviation sector.

“Unpaid dues”

While the tax department has claimed that SpiceJet has unpaid dues to the tune of ₹80.68 crore since February 2020, the airline has acknowledged dues of only over ₹63 crore.

The tax department has contended that “it is apparent that there was a deliberate attempt on behalf of the petitioner’s (SpiceJet) part in under-reporting the details of the supplies and the consequent tax liability arising therefrom.”

Court filings show that the tax department also said while SpiceJet had filed an application before the commissioner requesting a leeway to pay the dues in installments, it should have made the petition under section 80 of the CGST Act.

“The petitioner has made submissions only after issuance of show-cause notice for under-reporting of details and wrong filing of ‘GSTR 3B’. This conduct of the petitioner cannot be called unblemished,” it added. The airline has, however, said that its request for making payments in installment was much ahead of the show-cause notice issued by the tax department.

The issue adds to the ongoing financial woes faced by the airline. SpiceJet has defaulted on cash and carry payments to the Airports Authority of India (AAI). Airlines usually pay monthly charges to airport operators. Under the cash and carry mode, carriers have to make payments on a daily basis to avail themselves of airport services for their flights.

“SpiceJet is already making payments as per the plan submitted to the authorities. A GST input tax credit of ₹215 crore in favour of SpiceJet is also pending,” said a SpiceJet spokesperson

Published on August 12, 2021

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