The Telecom Ministry today issued show-cause notices to five private operators, including Bharti Airtel, Vodafone and RCom, for under reporting revenues, as per a special audit report, for assessment years 2006 to 2008.
Tatas and Idea Cellular have also been served notices by the the Department of Telecom (DoT) which has given 21 days time to response to the notices.
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The department has raised a demand of Rs 1,637 crore from these telecom firms, sources said, adding that after completion of the given period the operators would be given an opportunity for personal hearing by Telecom Minister Kapil Sibal.
Some of the operators confirmed receipt of the show cause notice.
However, it could not be confirmed that how much demand has been raised from these operators individually.
Telecom regulator Trai in 2009 had asked the Department of Telecom (DoT) to conduct a special audit of financial accounts of these five telecom companies for the 2006-08 period observing that operators were under-reporting their revenues to avoid payment of licence fee to the government through revenue share.
The move was to check operators' scope to arbitrage, which is shifting revenue from higher licence fee to the lower side. The UASL (basic and mobile) telephony has a licence fee of 6-10 per cent where as NLD, ILD, ISP and Internet Protocol has six per cent.
Trai had noticed that some of operators were showing more revenue in segment that carried lower licence fee.
The special audit was for those companies which have multiple licences - Unified Access Service Licence (UASL),
National Long Distance (NLD), International Lonag Distance (ILD) and Internet Service Provider (ISP). All the five companies mentioned above have all these licences.
The demand has been raised as part of licence fee not paid by operators and includes interest on it. Most of the players had earlier opposed such action saying their accounts were as per the norms and licence terms and conditions.
Reacting to the show cause notice send by the Department of Telecom (DoT) on underreporting revenues, a Vodafone India spokesperson said, "Vodafone India follows the highest standards of accounting discipline and compliance norms... We are confident that there is no additional fee liability for the period under audit. We will study the show cause notice when we receive it and decide on future course of action."
Country's largest private telecom operator Bharti Airtel has also confirmed the receipt of the notice.
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