DoT wants five telcos including Bharti Airtel, Vodafone, Reliance Communications to pay penalty by early march
NEW DELHI: After s lapping notices on five telcos - Bharti Airtel, Vodafone, Reliance Communications, Tata Teleservices and Idea Cellular - for allegedly understating revenues and hence paying lower levies during 2006-07 and 2007-08, the telecoms department (DoT) wants these companies to pay up penalties of about Rs 1,600 crore before the end of the financial year.
The DoT has therefore rejected the demands of these companies for an additional six weeks time to respond to the notices. Instead, it has decided to extend the deadline by two weeks to March 06, in order to collect the arrears before the end of next month, according to a DoT internal note reviewed by ET. The showcause notices asking these operators to pay up were issued on January 31.
The DoT after studying the audit reports of these mobile phone companies has concluded that these five operators together had understated revenues by Rs 10,268 crore during the two-year period. Since telcos pay 6-10% of their annual revenue as licence fee and 2-6% as spectrum usage charges, reporting lower revenue brings down the component they have to share with the government.
It is estimated that RCOM will have to pay penalties to the tune of Rs 551 crore while for Bharti Airtel it will be Rs 292 crore. The penalties for Vodafone works out to be Rs 254 crore. ET has learnt that Idea Cellular must pay about Rs 113 crore, Tata Teleservices Rs 273 core and Tata Communications Rs 120 crore. Last year, the law ministry had approved the telecom department's plans to issue showcause notices to telcos on this issue.
In 2009, the government had ordered external audits on the books of all leading private cellphone companies to make sure that they had correctly reported and shared revenue with it. Jaipur-based Parakh & Co audited RCOM's books.
Contractor, Nayak & Kishnadwala were the auditors for Bharti Airtel, Chhajed & Doshi for Idea Cellular and SK Mehta and Company looked at the books of Vodafone.
Source : ET