Wednesday, 22 January 2014

Telcos challenge Delhi HC order on CAG audit

The comptroller and auditor-general (CAG) should audit the account of the department of telecommunications (DoT) and not of telecom operators, felt Association of Unified Telecom Service Providers of India (AUSPI).
Recently, the Delhi high court had allowed the CAG to audit private telecom companies, as the government received revenue share from these. This move is being challenged by AUSPI in the Supreme Court.

AUSPI felt this was unconstitutional, and private parties are not to be audited by CAG. "The licence fee, which an operator pays from its revenue, goes into the accounts of DoT which in turn flows to consolidated fund of India. Hence, the receipts by DoT which is payable to the consolidated fund, can be audited by CAG," the industry body said.
According to the petition filed by AUSPI, Section 16 of CAG Act says its jurisdiction is limited to auditing the accounts of all receipts which are payable by various departments of the Union and states into the consolidated fund of India. It also said allowing CAG to audit them is a breach of licence conditions. Only DoT can conduct special audits of telcos.
Some of the audits conducted by DoT on telecos had opened up many gaps. DoT audited five telecom companies - Bharti Airtel, Vodafone India, Reliance Communications, Tata Teleservices and Idea Cellular in 2007-08. Based on these audits as much Rs 1,600 crore penalty was slapped on these operators.


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