Telcos caused Rs 12,500 cr loss to exchequer: CAG

RSTV Bureau
CAG in its report on revenue sharing said six telecom companies under reported their gross revenue by over Rs. 46,000 crore between 2006-07 to 2009-10.

CAG in its report on revenue sharing said six telecom companies under reported their gross revenue by over Rs. 46,000 crore between 2006-07 to 2009-10.

India’s apex auditor today said that the six telecom operators caused a loss of over Rs. 12,488 crore to government exchequer by under reporting their gross revenues for three years.

In its report on revenue sharing that was tabled in Parliament today, the Comptroller & Auditor General of India said six telecom companies – Reliance Communications, Bharti Airtel, Tata Teleservices, Vodafone India, Idea and Aircel under reported their gross revenues to the tune of over Rs. 46,000 crore between 2006-07 to 2009-10.

“Verification of records of six PSPs indicated total understatement of Rs 46,045.75 crore in gross revenue (GR), having corresponding impact of Rs 3,752.37 crore on licence fee and Rs 1,460.23 crore on spectrum usage charge,” said the CAG report.

“The interest on this non-payment of Licence fee and spectrum usage charges works out to Rs 7,276.33 crore,” the apex auditor said in its report on revenue sharing.

The report contains significant findings on correctness and completeness of revenue share paid to the government by Bharti Airtel, Vodafone India, Reliance Communications, Idea Cellular, Tata Teleservices and Aircel along with their subsidiaries for the period from 2006-07 to 2009-10.

The financial impact due to understatement of gross revenue stands at at Rs 1,507.25 crore for Reliance Communications, Rs 1,357.68 crore for Tata Teleservices, Airtel (Rs 1,066.95 crore), Vodafone (Rs 749.85 crore), Idea (Rs 423.26 crore) and Aircel (Rs 107.61 crore), the CAG said.

“Though the CAG report will go to public accountscommittee, whose recommendations will be final after approval by the house, yet the department will take a special audit which is authorised under the licence conditions to discover whether any outstanding due is legitimately required to be paid by the operators,” Telecom Minister Ravi Shankar Prasad said here.

The CAG presented its report on sharing of revenue by private telecom service providers (PSPs) in Parliament today.
“Verification of records of six PSPs indicated total understatement of AGR of Rs 46,045.75 crore for the period from 2006-07 to 2009-10,” CAG said. It added that government was deprived of a total revenue of Rs 12,488.93 crore on account of short/non-payment of licence fee of Rs 3,752.37 crore, spectrum usage charge of Rs 1,460.23 crore and interest of Rs 7,276.33 crore due from the six PSPs for the reported period.

CAG said the operators have understated the AGR by the amount of commission paid to their dealers, by promotional schemes like free talk time, by netting-off discounts from revenue pertaining to roaming services and infrastructure sharing.

The operators have also understated AGR by non-inclusion of interest income and profit from sale of investment. The companies have understated AGR for computation of SUC among others.

The CAG also flagged discrepancies in assessment of revenue share by DoT and non-existence of appellate mechanism leading to high number of litigations.

“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 DoT,” CAG said.

The report contains significant findings on correctness and completeness of revenue share paid to the government by Bharti Airtel, Vodafone India, Reliance Communications, Idea Cellular, Tata Teleservices and Aircel along with their subsidiaries for the period from 2006-07 to 2009-10.

In a separate report, CAG said DoT provided set-off of Rs 1,658.57 crore to Telewings Communications Services (TCSPL), now Telenor, Rs 1,626.32 crore to Sistema Shyam Teleservices (SSTL), Rs 1,506.82 crore to Videocon Telecom and Rs 684.59 crore to Idea Cellular following decision of Empowered Group of Ministers (EGoM) in 2012-13.

(With agency inputs).