The Department of Commercial Tax had issued a notice to Bharti Airtel demanding payment of Rs 24.18 crore by way of value added tax with penalty for 2005-06 saying broadband providers are liable to comply with the obligation.
The notice was served in August. However, the telecom company had approached the Karnataka High Court seeking to quash the demand notice. But it did not get a stay. When contacted, the Deputy Commissioner of Commercial Taxes, Mr A.K. Chitaguppi, confirmed the serving of the notice and said a final picture would emerge only after the court gives its verdict.
He said that he was not aware of similar demand notice being served on other telecom companies such as Reliance, BSNL, VSNL and Sify. According to Government sources, tax liability estimated at Rs 1,200 crore was due from the broadband providers, both in public and private sector.
They said supply of light energy, on which broadband lines operate, fell under the category of `goods' and its sale constituted taxable turnover attracting VAT at the rate of 12.5 per cent.
Hence, the authorities slapped a notice to Bharti Airtel to pay the said amount, the tax authorities contended.