SpiceJet has revealed that it failed to pay around Rs 220 crore in tax deducted at source (TDS) from employee wages between April 2020 and August 2023, resulting in a substantial financial hardship. The airline also owes more than Rs 135.3 crore in provident fund (PF) payments for the same time, according to a story published in The Economic Times.

The Bombay Stock Exchange (BSE) received a preliminary placement document (PPD) from SpiceJet, which revealed an extra Rs 72 crore in contested TDS for the assessment years 2009-2014. The airline also disclosed significant sums of unpaid goods and services tax (GST), customs, and service tax, all of which are marked as “disputed.”

Due to financial difficulties, the airline has acknowledged that it has been behind on statutory payments, such as TDS filings, GST reports, provident fund contributions, and gratuity obligations. SpiceJet said in its statement that the main cause of these delays is the company’s continuous financial issues.

In order to deal with its financial problems, the airline has said that it intends to raise Rs 3,000 crore via a Qualified Institutional Placement (QIP) by the end of the month. Spicejet intends to use the funds to return to full capacity and regular operations.

A significant portion of the money would be used to pay off delinquent taxes and employee contributions; an additional Rs 601.5 crore would be set aside to deal with late payments for TDS, GST, and provident fund. Creditors, which include bankers, engineering suppliers, and lessors of aircraft and engines, would get an extra Rs 750 crore in repayment.

SpiceJet is facing significant operational difficulties as well, with more than half of its aircraft grounded. Thirty-six of its sixty-four aircraft were out of commission as of June 30, 2024, owing to maintenance problems and budgetary constraints. In addition, the airline is dealing with defaults under aircraft leasing agreements and more than 25 ongoing lawsuits, excluding those against its promoter.

SpiceJet views increasing passenger volume and restoring grounded aircraft as essential steps toward profitability, and it plans to utilize the QIP cash for these purposes.

In addition, the airline has received many penalties from the Securities and Exchange Board of India (SEBI) for non-compliance; in the last three years, over 20 instances of violations have been recorded.