Mumbai:
SpiceJet has not paid Rs 135.3 crore in Provident Fund payments to employees for periods from April 2020 to August 2023, the airline said in a document filed with the Bombay Stock Exchange. It has also not paid Rs 220 crore in TDS, or tax deducted at source, from staff salaries for the same period.
This is in addition to nearly Rs 72 crore in TDS and Rs 84.5 crore in GST, or Goods and Services Tax, payments that are disputed, as well as crores due in service tax (including interest) and customs and customs duties (including penalties for delay), according to documents submitted by the airline.
The disputed TDS payments date from AY 2009/10 to AY 2013/14, and the GST dues range from July 2017 to March 2019. The oldest disputed figure is Rs 1.71 crore in service tax from April 2006.
A company spokesperson told NDTV SpiceJet “operates with full transparency” and that information about all relevant financial information, including statutory dues, “is available in the public domain”.
“Due to financial constraints we have had delays in payment, but we are fully committed to clearing our dues as soon as possible. The document submitted already outlines how the funds raised will be utilised, including towards clearing statutory dues,” the company said.
The disputes and non-payments arise from a “constrained financial position” underlined last month after a “difficult decision to temporarily place 150 cabin crew on furlough (leave without pay) for three months”.
The troubled airline hopes to raise Rs 3,000 crore from sale of securities to qualified institutional buyers, for which it has set a floor price of Rs 64.79 per share. A discount of “not more than five per cent” of the floor price, with shareholders’ approval, may be offered if deemed fit, SpiceJet said.
Proceeds from this sale will be partly used to pay statutory dues, including those listed above, as well as settle “certain outstanding liabilities of creditors, including aircraft and engine lessors…” and payment of employee dues and airport-related fees, the airline told the stock exchange.
Earlier this month SpiceJet said Carlyle Group’s commercial aviation investment and servicing unit would write off Rs 4 crore in lease arrears and convert Rs 3 crore into equity.
READ | Carlyle Aviation Will Write Off $40 Million In Lease Arrears: SpiceJet
SpiceJet expects to use Rs 601.5 crore – including Rs 297.5 crore for TDS dues and Rs 156.4 crore for deposit of outstanding PF contributions – to clear statutory dues. Rs 150.3 crore will be used to pay airport-related fees. The bulk, though, has been set aside to settle outstanding liabilities linked to aircraft and engine lessors, engineering vendors, and financiers, and maintenance of existing aircraft.
As many as 36 of SpiceJet’s 58 aircraft are grounded at this time, for reasons ranging from spare part (and) component availability to “the most optimal utilisation of resources”. The airline plans to use part of the proceeds to unground 24 aircraft, “comprising of the B737 family and Q400 aircraft”.
The airline’s operational fleet was slashed from 74 aircraft in 2019 to just 28 in 2024.
A further Rs 370 crore will be kept for induction of new aircraft, the airline said, indicating its belief that the road to prosperity is to get its grounded planes back in the air, as also expand its fleet and service network to see off established rivals and newcomers to the uber-competitive market.
Shares fell 5.23 per cent to close at Rs 73.72 on the BSE Tuesday.
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