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India: Special Audits by Telecom Department

October 27, 2018

Source: www.trai.gov.in

The mode of communication channelizes transmission for linking one person to another. Since communication plays an indispensable role in the life of a human being, the advancement in innovation technology has made possible the dissemination of information amongst the individual separated over vast geographical terrains thereby reducing such transfer through actual physical media while ensuring awareness, thus making it a small integrated interface.

Telecom Governance

The Government through its telecom branch- Department of Telecommunication (hereinafter referred to as “DoT”) enforces policies and guidelines for the regulation of telecommunication in India which is monitored by the Telcom Regulatory of India (hereinafter referred to as “TRAI”) in accordance to the provisions of Telecom Regulatory Authority of India Act, 1997 (hereinafter referred to as “TRAI Act”).

Auditing of telecom firms

In order to ensure proper adherence to the law and compliances to the applicable provisions, the accounts of the telcom companies are required to be adequately assessed and examined under the procedure of audit. Inspection of the financial statements at official level by the DoT helps to confirm credibility of the companies. In the said regard, DoT had been conducting audits with a view to determine the implementation of instructions issued, monitor subscriber verification by service providers, penalty for contravention to the statutory norms.

With a view to ascertain that no under-reporting miss reporting occurred during the audit for seven years beginning financial year 2012, the DoT is in the process of making auditing of telecom operators’ adjusted gross revenue (hereinafter referred to as “AGR”) an annual feature as delay causes inconvenience to the Government and the operators.[1]

This step comes in furtherance to sharp downturn observed in the payment of license fees and spectrum usage charges (hereinafter referred to as “SUC”) by the telecoms. While the companies involved in the telecommunication industry fear the advent of cumbersome compliances will add to the burden of already stressed sector, sparking more litigation areas and deploying more time and resources.

Aiming to secure the government dues which may be inaccurate currently due to the improper reporting and non-payment of the genuine fees by the telecoms, the DoT shall soon introduce an annual auditing system to keep a track preventing any evasion of the monetary liability casted thereon.

[1] https://telecom.economictimes.indiatimes.com/news/dot-to-conduct-special-audit-on-telcos-from-fy2012-onwards/65937560

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