Centre to slap demand notices on telcos for Rs.12,400 cr. loss

Action after CAG indicts 6 firms for under-reporting revenue

Interest on non-payment of LF and SUC worked out to Rs.7,276.33 crore, the CAG said. - File photo: Prashant Nakwe

The Centre is in the process of serving demand notices to telecom companies based on the CAG report alleging a loss of more than Rs.12,400 crore to the ex-chequer due to under-reporting of revenue, Parliament was informed on Friday.

The CAG report, tabled in Parliament in March, had indicated that six telecom operators, including Airtel, Idea and Vodafone, under-reported revenue by Rs.46,045.75 crore. It had a corresponding impact of Rs.3,752.37 crore on licence fee (LF) and Rs.1,460.23 crore on spectrum usage charge (SUC) paid to the government.

The interest on this short/non-payment of LF and SUC, the CAG said, worked out to Rs.7,276.33 crore. The audit was for the four-year period from 2006-07 to 2009-10.

“The demands on the basis of CAG report are being issued taking into account license agreement and pronouncements of judicial fora,” Minister for Communications Manoj Sinha said in a written reply to the Rajya Sabha.

Licence conditions

In a separate reply, the minister said the demands are being raised after recalculation, taking into account the CAG report, previous demands, and terms and conditions of the licence agreement.

DoT has collected an amount of Rs.1,40,281 crore as LF and Rs.47,374 crore as SUC since 1999-00 up till March 31, 2016.

In addition, the department had issued demands for Rs.22,233.61 crore for LF and Rs.5,353.88 crore for SUC as on March 31, 2016. Asked whether the government was not satisfied with the audit by CAG and had directed to get the audit done by other institution, Mr. Sinha replied that CAG and Department of Telecom have the independent powers to audit the telecom companies and both the audits were independent of each other.

“CAG conduct the audit of licensees under Comptroller and Auditor General (duties; powers and conditions of service) Act 1971. Department of Telecom has the powers to conduct an audit and/or special audit as per the clause 22.5 and 22.6 of the Unified Access Service Licence or equivalent clauses in other licences,” he said.

The Department had conducted a special audit in 2009, after which demands of Rs.1,847 crore and Rs.1,118.54 crore as LF and SUC were raised against five telecom companies.

However, these demands are subjudice, the Minister said.