DoT to issue notice to Reliance Jio, Telenor and 3 other telcos for understatement of revenues

As per the report of the CAG tabled in Parliament on December 19, firms have understated revenues by over Rs. 14,800 crore.

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In the wake of the CAG red-flagging understatement of revenues by firms, the Department of Telecom (DoT) will issue a notice to five telecom operators, including Tata Teleservices, Telenor and Reliance Jio, to recover an amount of nearly Rs. 2,578 crore.

DoT to issue notice to Jio, and 4 other telcos to recover Rs. 2,578 cr

 

"The DoT will raise demand of Rs. 2,578 crore from the five telecom operators as was mentioned by the CAG in its report this month. The demand will be raised after reconciling the accounts," an official source told PTI.

As per the report of the Comptroller and Auditor General of India (CAG) tabled in Parliament on December 19, Tata Teleservices, Telenor, Videocon Telecom, Qaudrant (a Videocon Group firm) and Reliance Jio have understated revenues by over Rs. 14,800 crore, resulting in a shortfall of nearly Rs. 2,578 crore to the exchequer.

The CAG report said the government was paid Rs. 1,015.17 crore less in license fee, Rs. 511.53 crore less in spectrum usage charge, and Rs. 1,052.13 crore less as interest applicable on delay in payment. The government collection from Tata Teleservices is short by Rs. 1,893.6 crore, Telenor - Rs. 603.75 crore, Videocon - Rs. 48.08 crore, Quadrant - Rs. 26.62 crore and Jio - Rs.6.78 crore for licence fee, spectrum usage charge (SUC) and applicable interest charges.

"The notices are expected to be sent to telecom operators in January," the source added. The CAG findings are based on the audit of Tata Teleservices and Tata Teleservices (Maharashtra) Ltd from 2010-11 to 2014-15; Quadrant Televentures (2006-07 to 2014- 15); Videocon Telecom (2009-10 to 2014-15); Telenor (2009-10 to 2014-15) and Reliance Jio Infocomm from 2012-13 to 2014-15.

Videocon Telecom, Telenor (Telewings) and Tata Teleservices have sold their mobile businesses to Bharti Airtel, while Quadrant has shut down its mobile services. CAG observed that telecom operators deducted discounts offered to dealers and customers; free talk time; interest earned from investments and some asset sales from their gross revenue.

 

As per the auditor, these should have been part of the adjusted gross revenue (revenue earned from telecom services) for calculation of license fee and SUC. CAG said these expenses are in the nature of marketing spends and cannot be deducted from revenue meant for calculating the government's share.

The auditor found that Tata Teleservices had written off bad debt that resulted in the understatement of its gross revenue by Rs. 1,026.01 crore. Unitech Wireless transferred its mobile business to Telenor's Indian arm Telewing Communications at a profit of Rs. 251.5 crore in 2013-14, but this profit was not included for computing revenue share with the government. Most of the deductions considered by the CAG for computing of revenue of telecom operators are sub-judice matters.

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