Under-reporting of gross revenue from Tata Communications led to drop in government fee collection of Rs 645 Crore: CAG


Tata Communications under-reported its gross revenue between 2006-2007 and 2017-2018, leading to a drop of Rs 645 million in license fee levies over the period, the Comptroller and Auditor General of the State said. India (CAG) in a report.

The CAG, in the report, also said the amount was to be recovered from Tata Communications Ltd (TCL).

“Careful review of AGR’s audited statements with reference to profit and loss statements and balance sheets for TCL’s NLD, ILD and ISP-IT licenses for the period 2006-07 to 2017-18 revealed that there was an under-declaration of Gross Income (GR) of Rs 13,252.81 crore and consequent short levy of LF of Rs 950.25 crore,” he said on Monday.

According to the CAG report, the Department of Telecommunications levied only Rs 305.25 crore as license fee (LF) from the company.

“After deducting the DoT’s assessment of LF of Rs 305.25 crore, the license fee demanded from TCL by the DoT was short of Rs 645 crore for the said period, which is to be demanded and recovered,” the report said.

“Given the minimum AGR rate of 0.15% for spectrum fees, the estimated revenue lost on a very conservative basis was Rs 67.53 crore for spectrum fees for an E-band operator and V and the expected annual revenue lost was Rs 3.30 crore for a Circle alone based on the average AGR (Adjusted Gross Revenue) reported by TSPs (Telecommunications Service Providers) for the year 2020-21”, he added.

The E and V bands are expected to correspond to a data transmission speed equivalent to optical fiber and are in high demand by telecommunications operators to accelerate the deployment of telecommunications services.

The CAG said the estimated revenue shortfall due to the delay in the allocation of E and V band spectrum is “only an indicative figure and the actual expected revenue could be higher depending on the number and the bandwidth of operators allocated to users”.

“The DoT can make a quick decision in consultation with TRAI on spectrum allocation/assignment for microwave access and backhaul network in E-band and V-band to provide support for mobile communications, to ISP service providers and for efficient deployment of 5G services,” the report said.

Cabinet in June approved a partial allocation of E-band spectrum to telecom service providers to meet backhaul demand from telecom operators.


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