India government orders new audit of telecoms

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India has government has ordered an audit of six telecom companies in order to re-examine the Comptroller and Auditor General’s (CAG) scrutiny.

The audit by the CAG found under-reporting of income by six telecom companies to the tune of Rs 46,045.75 crore from 2006-07 to 2009-10.

The six telecom companies that were audited by the CAG were Bharti Airtel, Vodafone, Reliance Communications, Idea Cellular, Tata Teleservices and Aircel.

The Congress party today alleged that the Modi government opted for an alternate re-evaluation of these figures by the Telecom Ministry through chartered accountants who are empanelled with them.

CAG had initiated an audit of the six telecom companies for four years from 2006-07 to 2009-10 at the instructions of the previous Congress-led United Progressive Alliance (UPA) government. CAG submitted its report in March 2016.

CAG specifically looked at under-reporting of income and non-uniform method of accounting adopted by various telecom companies and consequent lack of obligation to pay outstanding licence fee and Spectrum Usage Charges (SUC).

CAG found an understating of income by these six companies of Rs 46,045.75 crore in the four years.

CAG found that there was an amount of Rs 12,488.93 crore, which remains un-recovered by the government. This does not include penalty and other relevant taxes. Final loss for these four years would be even greater than the stated amount.

“Though there has been considerable increase in business, consumer base and income, even if loss of exchequer is calculated on the same formula for the years 2010-11 to 2015-16, this figure would be more than Rs 45,000 crore,” he added.

Congress also alleged that the audit by CAG was delayed due to a challenge before the courts regarding jurisdiction of CAG to audit accounts of private telecom companies.

Meanwhile, Department of Telecommunication said the CAG report on understatement of revenue by six telecom service providers by Rs 46,000 crore was received in February 2016. The report points out a shortfall of Rs 5,000 crore of License Fee and Spectrum Usage Charge and Rs 7,000 crore of interest.

DoT said demands raised from this exercise will be recovered with due interest and penalty as applicable under license agreements.