Recommending the Government to check the revenues of telecom companies from 1999, the CAG in its report tabled in Parliament on Friday exposed that from 2006 to 2010, six major operators had under-invoiced
Rs 46,045.75 crore resulting a tax loss of Rs 12,488.93 crore to the exchequer. The apex auditor caught Airtel, Tata, Reliance Communications, Idea, Vodafone and Aircel for hushing up their revenues to evade mandatory remitting of portion of the revenue to the Government, which was collected from people.
The Pioneer had on March 8 carried a report about under-invoicing and resultant tax evasion by six telecos. The detailed audit report has devoted one chapter for each telecom company’s revenue during the four years and tax evasion. Among the total tax evasion of more than Rs 12488 crore, Reliance Communications evaded Rs 3728.54 crore and Tata evaded Rs 3215.39 crore. CAG found Airtel evaded Rs 2651.89 crore, followed by Vodafone (Rs 1665.39crore), Idea (Rs 964.89 crore) and Aircel (Rs 262.83crore).
“In conclusion, audit found that even after 16 years of the introduction of the revenue share regime, the correctness and completeness of revenue flowing into the Consolidated Fund of India could not be assured by Department of Telecom,” said the report.
CAG found dubious accounting pattern of telecom companies during the probe on 2G Scam. The then CAG Vinod Rai ordered for audit of private companies in 2010. All telecom companies challenged the CAG’s move to audit them in Courts. Finally in April 2014, Supreme Court ratified CAG’s decision through a landmark judgment.
In its report, the CAG has blamed the Department of Telecom’s (DoT) several wings for not checking the revenue of the telecom companies. As per the licensing agreement, from 1999, the operators have to share a certain portion of revenue collected with the Government.
“The licence Finance (lF) wing in DoT is responsible for the assessment of Gross Revenue (GR) and final computation of the revenue share payable by the licensees considering the collection details and verification reports received from the Offices of the Controllers of Communication Accounts (CsCA).
“lack of coordination between the licence Finance (lF) wing and the Wireless Planning Finance (WPF) division of DoT, the two units responsible for the final assessment of revenue share, led to non consideration of certain revenue items by WPF wing which were added back by lF wing taking into account the verification reports of CsCA and disclosures in audited financial statements of Private Service Providers (PSPs) resulting in under assessment of Spectrum Usage Charges (SUC) by WPF wing,” said the report blaming the DoT for not checking the malpractices of the telecom companies.