Huge tax evasion by OFC providers unearthed in Karnataka

Bangalore, Oct 9 (UNI) Unearthing a tax evasion to the tune of Rs 1,200 crore by optic fibre cable (OFC) Broadband providers, both in public and private sectors, the Commercial Tax authorites have slapped a notice on Airtel, owned by Bharti Televentures Ltd, seeking a payment of Rs 24.18 crore, that includes tax, interest and penalty, for sale of 'light energy' to its customers.

The evasion came to light when the state tax officials visited the premises of Bharti Televentures in the city, which was one of the largest OFC broadband providers in the private sector, in April this year.

Supply of light energy, on which broadband lines operate, fell under the category of 'goods' and its sale constitute taxable turnover attracting VAT at the rate of 12.5 per cent. Hence the authorities slapped a notice to Bharati Televentures to pay the said amount, the tax authorities contended.

Apart from Bharti Televentures, some other OFC broadband operators, both in public and private sectors, supply light energy to enable their customers to transmit data. They include public sector BSNL and private sector VSNL, Reliance, Tata Consultancy Services and Sify, apart from Airtel.

Bharti Televentures had approached the Karnataka High Court seeking to quash the demand notice, but failed to get a stay when the case was heard by Justice Shantanu Goudar on September 1. The Judge rejected the plea seeking issue of an injection against any initiatives from the tax department on the recovery of the taxes.

Taking into consideration the fact that OFC broadband line providers like Airtel and others were operating for the past ten years, the loss of state exchequer was estimated to the tune of Rs 1,200 crore in the state, top revenue officials told UNI.

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