SpiceJet has made a startling announcement revealing that it has not remitted approximately ₹220 crore in Tax Deducted at Source (TDS) from employees’ salaries to tax authorities from April 2020 through August 2023. Additionally, the airline owes over ₹135.3 crore in Provident Fund (PF) contributions for the same duration.
In the preliminary placement document (PPD) submitted to the Bombay Stock Exchange (BSE), SpiceJet stated that around ₹72 crore of the TDS for the assessment years 2009-10 to 2013-14 is currently disputed. The document also indicates significant dues in customs, service tax, and Goods and Services Tax (GST) as being in dispute.
According to SpiceJet, “Due to our constrained financial position, we have delayed the deposit/payment of statutory dues.” These outstanding dues encompass TDS, timely filing of TDS returns, gratuity payments to employees, PF, and the filing of GST returns.
SpiceJet’s Plan to Raise ₹3,000 Crore to Survive
To navigate its financial challenges, SpiceJet intends to raise ₹3,000 crore by the end of the month through a Qualified Institutional Placement (QIP) targeted at eligible institutional investors. The airline has received consent for the QIP from Yes Bank, while ICICI and Indian Bank are still in the decision process.
The funds raised from this initiative will be allocated to ameliorate SpiceJet’s financial condition and assist in resuming full operations. A primary objective is to settle ₹601.5 crore in overdue taxes and contributions, which includes TDS, PF, and GST. Additionally, ₹750 crore will be directed towards settling debts owed to creditors, such as aircraft and engine lessors, engineering vendors, and financiers.
Overview of SpiceJet’s Financial Troubles
SpiceJet’s filing also highlighted that it is involved in over 25 pending litigations, not counting those against its promoter. The airline has reported significant defaults in aircraft lease agreements, resulting in the grounding of more than half its fleet and prompting legal actions from lessors and other vendors.