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Reliance Jio among 5 telcos in CAG dock for understating revenue by Rs 15,000 cr, causing Rs 2,500 cr loss to govt

As per the CAG report, the five companies understated revenue to the tune of Rs 14,813.97 crore.

Edited by: India TV Business Desk, New Delhi [ Updated: December 20, 2017 10:13 IST ]
Of the five companies named in the CAG report, only
Image Source : PTI Of the five companies named in the CAG report, only Reliance Jio now runs full-scale operations.

Non-compliance with licence conditions by five telecom operators led to a shortfall in payment of revenue share to the government to the tune of Rs 2,578.83 crore, a report by the Comptroller and Auditor General (CAG) released on Tuesday said.

The five companies in the dock for under-reporting of revenue include Tata Teleservices and Tata Teleservices (Maharashtra), Quadrant Televentures Ltd, Videocon Telecommunication Ltd, Telenor group and Reliance Jio.

The CAG audit relates to varying periods from 2006-07 to 2014-15.

According to the CAG, its audit of the basic accounting records and documents of the said companies indicated total understatement of annual gross revenue (AGR) of Rs 14,813.97 crore and a consequent shortfall in payment of revenue share to the government to the tune of Rs 1,526.70 crore.

The interest due on the shortfall in payment of revenue share for the period up to March 2016 was Rs 1,052.13 crore, the report added.

Tata Teleservices Ltd and Tata Teleservices (Maharashtra) Ltd together accounted for the maximum amount of Rs 1,893.60 crore, while Reliance Jio Infocomm Ltd’s share was Rs 6.78 crore.

Reliance Jio said the charge against it is related to an issue that is currently sub-judice.

“The charge on Reliance Jio is related to ‘revenue share on realized forex gain’. This is an industry issue and was referred to TDSAT (Telecom Disputes Settlement and Appellate Tribunal) which ruled in favour of telecom operators. However, the TDSAT decision was appealed against by DoT (Department of Telecommunications) and this matter is currently sub judice with the Supreme Court,” Mint quoted a spokesperson at Reliance Jio as saying.

Notably, Jio had not begun commercial operations during the period the audit was undertaken. The company began commercial operations only in September 2016.

However, the government estimates AGR as 5% of the bid value of the spectrum for which it collects spectrum usage charges and licence fee.

Of the five companies named in the CAG report, only Reliance Jio now runs full-scale operations. 

Videocon shut down operations in 11 circles where the Supreme Court cancelled licences in January 2012. It subsequently won spectrum in five of those circles in a November 2012 auction but exited the mobile business completely almost two years ago.

Quadrant Televentures (formerly HFCL Infotel), a subsidiary of Videocon Telecom which ran the latter’s mobile services in Punjab, ceased operations in February 2017.

Bharti Airtel in October announced the acquisition of Tata Teleservices and Tata Teleservices (Maharashtra) on a debt-free, cash-free basis. 

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