Published On : Mon, Jul 2nd, 2018

Vijay Mallya’s Private Jet Finally Gets a Buyer, Gets Sold For a Paltry Rs 35 Crore

New Delhi: After four failed attempts since March 2016, the service tax department on Sunday managed to find a buyer for the beleaguered liquor baron Vijay Mallya’s confiscated luxury jet, with a Florida-based Aviation Management Sales emerging as the highest bidder for Rs 34.8 crore (USD 5.05 million) last Friday, according to PTI.

The Airbus A-319 – belonging to the chairman of the now defunct Kingfisher Airlines – was seized in December 2013 by the service tax department after Mallya failed to pay dues worth around Rs 800 crore.

In its bid to recover the dues, the Indian authorities tried to sell the $90 million aircraft several times but failed to do so as it didn’t receive an appropriate bid.

However, the deal was finally done through a e-auction, following an order by order by the Karnataka High Court which had fixed June 29 and 30 for the online auction of the private airbus. The order also said that the buyer will have to pay an additional 28 per cent GST on the auction amount.

The deal will go through after the Bombay High Court approval.

“Mallya’s private luxury jet has finally found a buyer at an e-auction conducted by the state-run auctioneer MSTC last Friday. The Florida-, US-based firm Aviation Management Sales LLC quoted the highest bid of Rs 34.8 crore and won the bid,” the source told media.

The department had initially fixed Rs 152 crore as the reserve price at the first auction attempt in March 2016.

In the first auction in March 106 as part of their attempt to recover money from the beleaguered businessman Mallya, who is facing extradition from London now, a lone bidder turned up and quoted a meagre Rs 1.09 crore, against the reserve price of Rs 152 crore. The department rejected the bid and then lowered the reserve price by 10 per cent.

The plane was attached by the service tax department in December 2013, claiming tax dues of over Rs 800 crore from Kingfisher Airlines. The service tax department was forced to sell the aircraft after the Mumbai airport operator MIAL moved the Bombay High Court seeking a direction to the department citing heavy losses on account of the non-productive use of its space. The auction, in the past, had failed as the bids were much below the reserve price, which was cut to USD 12.5 million from USD 22.5 million initially.

The last bidding was conducted by MSTC in March 2017. This January, the Bombay High Court had directed the official liquidator of the Karnataka High Court, who has been in charge of the assets and books of Kingfisher Airlines, to take required steps to take away the plane as it is been occupying space at the highly congested Mumbai airport all these while.