DoT to demand Rs 1,593 cr from cos for under reporting revenue

Trai had noticed that some of operators were showing more revenue in segment that carried lower licence fee.

Last Updated: Jan 03, 2012, 21:58 PM IST

New Delhi: The Telecom Ministry will raise a demand of over Rs 1,590 crore from five telecom firms, Tatas, Vodafone, RCom, Bharti and Idea for under reporting revenues, as per a special audit report, for the assessment years starting from 2006 to 2008.

The Department of Telecom (DoT) will send show-cause notices to these operators in this regard, sources in the know said, adding that "but prior to sending notices, Telecom Minister Kapil Sibal may hold a session with these players".
The show-cause notices to be issued are on account of special audit report, they said.
For assessment years starting from 2006 to 2008, the Telecom Ministry has arrived at a figure of Rs 550 crore dues on Reliance Communications, Rs 393 crore from Tata Teleservices and Tata Communication; Vodafone has to pay Rs 245 crore, Bharti Airtel has to pay Rs 292 crore and Idea Cellular Rs 113 crore, according to sources.
Telecom Regulator TRAI in 2009 had asked the DoT to conduct a special audit of the financial accounts of these five telecom companies for the 2006-08 period observing that operators were misreporting their revenues to avoid payment of licence fee to the government through revenue share.
The move was to check operators' scope to arbitrage, which is shifting revenue from higher licence fee to the lower side. The UASL (basic and mobile) telephony has a licence fee of 6-10 per cent where as NLD, ILD, ISP and Internet Protocol has six per cent.
Trai had noticed that some of operators were showing more revenue in segment that carried lower licence fee.

The special audit was for those companies which have multiple licences - Unified Access Service Licence (UASL), National Long Distance (NLD), International Lonag Distance (ILD) and Internet Service Provider (ISP). All the five companies mentioned above have all these licences.
Sibal is likely to meet all these operators on January 13 and has sought the recommendations of an internal committee which looked into the audit reports and recommended recovery of dues.
"Since most of the issues in dispute seem to be common to all major telecom service providers... I would like to have detailed presentation/discussion on all important issues...," Sibal is understood to have told his department.