Tax dept freezes bank accounts of Kingfisher Airlines, Air India

India's tax officials have frozen 11 bank accounts of Kingfisher Airlines and 10 of Air India AIR.UL earlier this month as they have failed to pay their service tax dues, an official from the Mumbai service tax department said on Friday.
State-run carrier Air India owes the department 1.5 billion rupees, while India's third largest airline Kingfisher owes the department 700 million rupees for the April-August period, said S.K.Solanki, commissioner of service tax (zone 1, Mumbai commissionerate) of the Central Board of Excise and Customs.
Service tax is an indirect tax which is imposed on services called "taxable services."
Many Indian carriers including state-run Air India are troubled by rising fuel costs and price wars emanating from intense competition causing investors and government to worry about their survival.
The Vijay Mallya-owned Kingfisher is desperately scouting for funds from potential investors and more cushion from its banks to keep afloat.