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Punjab govt slaps Rs 684 cr tax evasion notice on Fastway; MSO denies charges

MUMBAI: The Punjab government has slapped a Rs 684-crore tax evasion notice on multi-system operator (MSO) Fastway Transmission for allegedly evading taxes by under-declaring subscriber numbers.

The Gurdeep Singh Jujhar-promoted MSO, which is believed to have close links with the Badal family, has been accused of evading entertainment tax, sales tax, road digging charges and charges for using electricity poles in the 10-year reign of the Akali Dal government.

The charges were made by Punjab local bodies minister Navjot Singh Sidhu on the floor of the assembly.

According to media reports, Sidhu alleged that Fastway had enjoyed Badal family’s patronage. He was replying to Congress MLA Sukhjinder Singh Randhawa during the question hour.

Sidhu also alleged that the company, which had started out with Rs 25 lakh capital, showed profit of Rs 30 crore during its first year.

“It created a monopoly by intimidating cable operators. It rendered over one lakh youth jobless,” he noted.

Fastway, he said, evaded taxes to the tune of crores, citing information gathered through Right to Information (RTI). “There are 8,000 cable operators in Punjab, of which 6,000 are directly under Fastway and 1,500 indirectly. But the company shows just 1,500 operators on its logbooks,” he said.

Sidhu also said that the MSO, taking advantage of its links with the erstwhile ruling party, evaded sales tax on set-top boxes, gave no security refunds and only 150 cable operators (under it) paid entertainment tax. He also accused the MSO of under-declaring subscriber numbers.

“There are over 80 lakh television connections in Punjab, but it shows just 1.25 lakh on its books,” he stated.

He also claimed that the company even bullied Reliance Communications, which was laying cables for 4G mobile services, to lay its cable too, for free.

While a company has to shell out Rs 500 for every metre of road-cutting to lay cables, and Rs 1,000 for every manhole, Fastway had paid nothing for laying its network in Punjab, he pointed out.

Sidhu revealed that the company had not paid entertainment tax worth Rs 184 crore tax, including interest and fines. Additionally, it had failed to deposit Rs 220 crore sales tax in the past five years.

Taking a vow to uproot Fsatway’s network, Sidhu said that the MSO was posing a threat to national security and demanded a separate criminal action under the National Security Act, 1980, of India.

Meanwhile, Fastway has issued a press statement denying Sidhu’s allegations.

“The company has permissions from all the departments concerned such as PWD, canal department, forest department and railways, etc. The company is regular in payment of entertainment tax and there are no outstanding taxes due to tax theft by the company. The company is installing the set-top boxes on the basis of refundable security,” said a statement by Fastway CEO Piyush Mahajan.

Clarifying that MSOs and LCOs are separate entities, the company said, “The company has nowhere and never declared that it has only 1.25 lakh connections. All connections/subscribers are declared with the regulatory authority TRAI. The company is regular in paying the due service tax.”

Fastway added that of the 10,500 km of underground fibre cable, it has taken 6,500 km on lease from different companies such as Connect, Airtel, BSNL and Reliance Communications and that it owns the balance 4,000 km.

“The optic fibre laying charges and road-cutting charges have regularly been deposited to the company concerned,” the statement noted.