Telcos under I-T scanner for alleged tax breach: Sources
August, 09th 2011
Faced with a stiff annual direct tax target, the taxman is leaving no stone unturned to rake in the moolah from India Inc.
CNBC-TV18's Ashwin Mohan now learns that revenue authorities have now detected alleged TDS violations by leading telecom operators.
According to the stance taken by the I-T department, the discount earned by the telecom distributors and agents on sale of prepaid SIM cards and recharge coupons is in the nature of commission and hence it attracts 10% TDS. However, the telcos have disagreed saying that TDS should not be deducted.
Sources say, with three High Court judgments in their favour, the I-T department has recently conducted surveys on telecom majors Tata Tele and Vodafone. These surveys are on the basis of non-deduction of TDS on the sale of SIM cards and recharge coupons.
Now, the department is examining company records starting FY10. Sources say the total TDS liability, including the interest, is currently being finalized and a report is likely to be sent to the Finance Ministry.
Remember, there are larger implications to this operation because similar surveys are likely to be conducted on other telcos in other jurisdictions in India.
Now, as far as official comments are concerned, Vodafone has said that the survey was conducted and information was given by them to the I-T department, however, Tata Tele has declined to comment.