Sahara says it won’t pay service tax on Jetlite

June 19th, 2008 - 7:33 pm ICT by IANS  


Mumbai, June 19 (IANS) The Sahara Group has said that it is not liable to pay a service charge of $25 million (Rs.1 billion) on Jetlite, formerly Air Sahara. The company made the statement after Jet Airways, current promoters of Jetlite, said the service tax liability on the low-cost airlines would rest with Sahara, its previous owners.

“As per the provisions of the agreements, the liability, if any, for the tax demands in respect of which the investigations are currently in progress rests with the earlier owners of the Sahara Airlines,” Jet Airways said in a statement.

Referring to the inquiry by Director General of Central Board of Excise and Customs, Jet said the inquiry relates to a period prior to its $362.5 (Rs.14.5 billion) acquisition of Sahara Airlines Ltd in April last year.

But Sahara contests this stand.

In a counter-statement, a Sahara group spokesperson said: “As per our understanding, the selling shareholders are not liable for service tax liability under the share purchase agreement read with the arbitral award.”

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