Sidhu claims Fastway cable ‘scam’ tip of iceberg, worth Rs 2,300 crore and counting
Sidhu had raised the issue of alleged tax evasion by Fastway, which is purportedly owned by the Badals of Shiromani Akali Dal (SAD), at the meeting on Wednesday, at which the CM had asked him to consult the state advocate general.punjab Updated: Jul 08, 2017 09:02 IST
Punjab local bodies minister Navjot Singh Sidhu’s tirade against Fastway Transmissions, the company that came to enjoy monopoly over the cable TV business in the state during the Badal regime, continued on Thursday, a day after he found some support from chief minister Captain Amarinder Singh at a cabinet meeting.
Sidhu had raised the issue of alleged tax evasion by Fastway, which is purportedly owned by the Badals of Shiromani Akali Dal (SAD), at the meeting on Wednesday, at which the CM had asked him to consult the state advocate general. The cricketer-turned-politician held a press conference on Thursday to claim that the “scam” was much bigger if central taxes of “thousands of crores” too were taken into account.
Showing a letter written by him to chief commissioner for excise and service tax (now central goods and services tax) Manoranjan Kaur Virk, Sidhu said the department furnished “half-baked” information.
COUNTERING CENTRAL VERSION
“The department sent Fastway over 1,100 recovery notices without invoking section 73(A) of the Finance Act, thus allowing local cable operators to go on appeal against the notices. The evasion of taxes is much bigger than it appears. From using electricity poles, to digging roads, manholes and railway overbridges, for laying underground cable, the company did it all at night, without paying charges to government departments,” he said.
“I have asked my department to compile a list on the evasion. The officers sought two weeks’ time for it, but I have given them a week. The scam, as we see it now, is just the tip of the iceberg,” Sidhu added.
Virk’s reply to Sidhu says an audit of Fastway and its 12 sister concerns resulted in 107 audit objections with total evasion of Rs 32 crore of service tax of which Rs 10 crore has been recovered. “Show-cause notices for recovery of the remaining amount have been issued to the companies,” it says.
EXPLAINING THE EVASION
But, a former officer of the central excise and central tax department, SL Goel, whom Sidhu brought with him for the media interaction, tried to puncture the claims of his former department. He said service tax evasion alone adds up to Rs 2,300 crore. “Taking interest and penalty, it amounts to Rs 2,618 crore.”
“The service tax was collected by the cable operators but not deposited with the central department. Along with its 12 sister concerns, the company imported 43 lakh set-top boxes and availed refund of central value-added tax (CENVAT). But since it never refunded the security amounts on the boxes, it had to reverse the CENVAT, which it never did. It failed to reverse Rs 100 crore of CENVAT in the last five years, which attracts 100% penalty, thus another Rs 100 crore,” he added.
He also claimed that Fastway cancelled invoices worth Rs 36 crore after closure of financial year 2014-15, in May-June 2015. “The tax liability and penalty on that add up to Rs 10 crore,” he said.
Trashing claims made by Fastway in newspaper advertisements released against Sidhu’s assertions, Goel said, “The company has admitted (in figures given to HT, too, in 2015) that 6,500 cable operators of the 8,000 in Punjab were working with it. There are nearly 13,000 villages in Punjab, and each village has TV connections. So the number of connections under Fastway is much larger than it agrees to.”
Sidhu underlined that the CM asked him to speak to AG Atul Nanda on the matter. “We are going after them (Fastway). The tax evasion story is going to only get bigger as we unearth the scam layer by layer, and thoko (slap) penalty on them.”