6 TELECOS HUSHED UP OVER RS45K CR: CAG

http://www.dailypioneer.com/todays-newspaper/6-telecos-hushed-up-over-rs45k-cr-cag.html#

In what could be a mega scandal, the Comptroller and Auditor-General (CAG) has unearthed under-invoicing of revenue to the tune of over Rs45,000 crore by six telecom companies from 2006 to 2010. The CAG submitted a related report to the President’s Office and the Ministry of Finance in mid-February. The report, which is expected to be tabled in Parliament during the Budget Session, says that due to this massive under-invoicing, the exchequer lost more than Rs12,000 crore in taxes, that does not include penalty for tax evasion.

Given the go-ahead by the Supreme Court and the Delhi High Court, the CAG audited the revenue and expenditure receipts of Airtel, Vodafone, Reliance Communications, Idea, Tata and Aircel.

The auditors decided to undertake this exercise after they came across several cases of discrepancies in revenue calculations of the telecom companies in 2010 when the CAG was preparing the 2G scam report.  Alerted by the auditors, then CAG Vinod Rai ordered auditing of the revenue and expenditure of the six telecom companies.

After they challenged the decision in court, in 2011 Delhi HC asked the six telecom companies to share their accounts with the CAG and passed an order ratifying the CAG’s decision in January 2014. The SC in April 17, 2014, upheld the Delhi HC’s judgment on CAG’s power to audit any entity related to the revenue and expenditure of the Government.

During the audit, which officially started during August 2014, the CAG had called for the records and inspected the offices of all telecom companies.

“We were happy to note that there were several whistleblowers forthcoming to reveal the methods of under-invoicing by the telecom companies. Some companies were maintaining actual and manipulated accounting books and these whistleblowers helped us track down the original revenue earned,” said a senior auditor of the team engaged in the audit of the telecom companies.

According to the auditors, each of the six firms under-invoiced the revenue between Rs6,000 crore and Rs18,000 crore.

“What we noted is the difference in auditing in Government and private sectors. In the Government sector, not many people will come forward to help us, whereas in the private sector several people are forthcoming to expose the frauds to CAG,” he added.

During the 2G scam audit, the CAG found discrepancies in the customer base of the telecom companies and revenue and tax figures. The telecom companies fielded a battery of top lawyers to oppose the CAG in the High Court and the Supreme Court.

The estimated tax evasion figure of over Rs12,000 crore is based on the tax structure and telecom levy norms between 2006 and 2010.

The loss figure does not include the penalty for under-invoicing of revenue.

It is expected that if the Government start acting on the CAG report, the telecom companies might have to pay up to  Rs30,000 crore to the exchequer by way of tax and penalty.

About janamejayan

A Viraat Hindu dedicated to spread the message of Paramacharya of Kanchi
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