How and why SpiceJet got stuck in trouble… the company did not even have money left for the PF of the employees

SpiceJet has defaulted a total of Rs 90 crore on tax, GST payment and PF dues of employees in FY 2021.

SpiceJet in trouble

The clouds of crisis are hovering over the debt-ridden SpiceJet. The auditors overseeing SpiceJet’s audit have cautioned the stakeholders, raising doubts about the group’s ability. SpiceJet’s net worth has come down. SpiceJet has defaulted a total of Rs 90 crore on tax, GST payment and PF dues of employees in FY 2021.

SpiceJet Group incurred a loss of Rs 1,028.18 crore as on 31 March 2021. Including the previous losses, the total loss has reached Rs 4,223.38 crore. The liabilities on the airline are Rs 5,18,424.9 crore more than the current assets.

Aviation industry in trouble

Experts say that the aviation industry has suffered a lot due to expensive crude oil and corona. The steps taken by the government have got some benefit. The difficulties of the aviation sector may increase in the coming days. Because crude oil is getting increasingly expensive. That is why, government companies have increased the prices of air fuel.

Aircraft fuel (ATF) prices have been increased by 2.75 per cent amid increase in international crude oil prices. In the national capital, the ATF price has been increased by Rs 2,039.63 per kiloliter to Rs 76,062.04 per kiloliter. Aircraft fuel prices are revised on the 1st and 16th of every month.

What will happen to SpiceJet now?

The auditors informed the stakeholders that SpiceJet has outstanding dues of PF, ESI, Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, VAT, GST and other taxes.

Under the Income Tax Act, 1961, the company has outstanding TDS of more than 28.11 crores between April and September 2020. The Central Goods and Services Tax Department also owes 30.81 crore on this.

The auditors said that the company has not even deposited the PF of the employees for more than one and a half years. Between March 2019 and September 2020, SpiceJet has to deposit a PF of 32 crores.

Employees say their salaries were cut and in some cases not paid. As of March 2021, the company had 14,810 employees, down from 16,280 in the previous year.

The stock disappointed investors

The impact of the company’s weak performance is visible on the stock. The stock has lost 6 per cent in a month. At the same time, there has been a decline of 11 percent in 3 months and 30 percent in one year.

Gagan Patil, Money9

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