Telecom stocks up to 4% down on Rs 12,500-crore tax notice
The CAG found that six mobile operators had underreported revenues of nearly Rs 46,000, causing a nearly Rs 12,500 crore loss to the government.
The shares of mobile operators slumped on the BSE on Friday after the Department of Tax said it was in the process of slapping six telecom operators with a Rs 12,500 crore tax notice for underreporting revenue of Rs 46,000 crore.
An investigation by the government's auditor found that six telecom operators -- Bharti Airtel, vodafone India, Aircel, Reliance Communications, Tata Teleservices and Idea Cellular -- had understated revenue of up to Rs 46,000 crore in the four years from 2006-07 to 2009-10.
On Friday, the shares of Idea Cellular were down 3.05% at Rs 101.70 per share, slightly up than the day's low of Rs 100.55. The shares of Bharti Airtel were down 2.37% at Rs 354.70, Tata Communications was down at Rs 478.50, down 1.01% and Reliance Communications was down 2%.
"The DoT is in the process to issue demand notice of over Rs 12,500 crore to six telecom operators – RCom, Tata Tele, Vodafone, Airtel, Idea and Aircel – which the CAG has found to have under-reported revenues during the UPA regime," a telecom ministry official, was quoted in a PTI report.
The Comptroller and Auditor General of India (CAG) in a report tabled in Parliament in March said these six companies under-reported their adjusted gross revenue (AGR) by Rs 46,045.75 crore, leading to a loss of Rs 12,488.93 crore to the exchequer from 2006 to 2010, the report said.
The auditor reported instances of under reporting of revenue due to netting off of discounts/waivers granted to post-paid subscribers and under-invoicing of roaming revenue due to set-off of inter-operator traffic discounts paid to other operators. Also, there was under-reporting of revenue from infrastructure sharing with other telecom operators as well as from forex gain, the PTI report said.
(With inputs from PTI)