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SpiceJet hasn't paid Rs 427 cr in GST, TDS, and PF dues since 2020: Report
Photo Courtesy: Wikimedia Commons

SpiceJet hasn't paid Rs 427 cr in GST, TDS, and PF dues since 2020: Report

| @indiablooms | 17 Sep 2024, 11:52 pm

Mumbai: Budget airline SpiceJet announced on Tuesday that it failed to pay statutory dues amounting to Rs 427 crore between March 2020 and August 2024, citing its "constrained financial position", media reports said.

The unpaid dues include Rs 219.8 crore in tax deducted at source (TDS), Rs71.33 crore in goods and services tax (GST), and Rs 135.47 crore towards provident fund (PF) contributions, reported Business Standard.

The airline, which is facing financial challenges, also revealed that 36 of its 58 aircraft are grounded, mainly due to an "alleged default" in payments to aircraft lessors, financial difficulties affecting aircraft maintenance, and a shortage of components and spare parts.

These disclosures were part of SpiceJet's preliminary placement document, submitted to the BSE in an effort to raise up to Rs 3,000 crore through a qualified institutional placement (QIP) at a floor price of Rs 64.79 per share, the report said.

Legal experts told Business Standard that failing to remit GST is considered a serious offence, as the tax has already been collected from customers but not paid to the government.

They warned that non-payment of GST could be treated as a criminal offence, potentially resulting in a minimum jail term of 60 days. However, unpaid TDS can be settled later with interest.

SpiceJet has launched a qualified institutional placement (QIP) to raise up to Rs 3,000 crore at a floor price of Rs 64.79 per share, the company announced on September 16 in a filing to the exchanges, along with a preliminary placement document. The floor price represents a 16.7% discount to the current market price.

"Pursuant to Regulation 176(1) of the SEBI ICDR Regulations and in accordance with the approval of the shareholders of the Company accorded through a special resolution passed by way of postal ballot on September 13, 2024, the Company may at its discretion offer a discount of not more than 5% on the floor price for the Issue. The Issue price will be determined by the Company in consultation with the lead managers appointed in relation to the Issue," according to a regulatory filing.

The entire proceeds from the fundraising will be available to SpiceJet, the company stated.

The airline has been actively seeking to raise capital to bring more aircraft back into operation and reduce its debt burden.

These funds will also help stabilize its operations and support future expansion, according to the company.

SpiceJet faced a challenging June quarter due to reduced flight operations. Earlier, news agency PTI reported that Chairman Ajay Singh is considering selling more than 10% of his stake in the airline to aid its turnaround, with a funding round expected to conclude by the end of September.

For Q1FY25, the airline's consolidated net profit fell 20% year-on-year to Rs 158 crore, while total income dropped 8.3% YoY to Rs 2,077.7 crore. However, on a sequential basis, net profit after tax increased by 24% from Rs127 crore in the previous March quarter.

QIPs provide companies with a fast and efficient way to raise capital.

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