AAP alleges 2800 Crores Tax Fraud by FW Cable patronised by Dy CM Sukhbir Badal

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Alleging tax evasion of abut Rs 2800 Crores by Fastway Transmissions Services (P) Limited and its allied companies, the Aam Aadmi Party has sought a CBI inquiry. The tax evasion has been done by the companies are being controlled by Gurdeep Singh Jujhar and his associates in Punjab, in connivance with the Deputy CM Sukhbir Singh Badal during the past eight years since the Cable Mafia became active, AAP leaders said.

The Addressing the press today at Chandigarh, Aam Aadmi Party’s Punjab Spokesperson Sukhpal Khaira and Senior leader, Kanwar Sandhu said that the entire Northern Region consisting of Punjab, Chandigarh, Himachal Pradesh and parts of Haryana have come under the monopolistic and illegal control of Fastway Transmissions Services (P) Limited and their allied companies since 2008-2009. The evasion of Income Tax/ TDS, Service Tax, Entertainment Tax, Pole Usage Charges and Optical Fiber Cable Laying and Road Cutting charges is in violation of the Finance Act, 1994 and various other Union and State laws. The total tax evasion by Fastway and its allied companies in Chandigarh, HP and parts of Haryana, besides Punjab could be to the tune of Rs 5,000 Crore.

AAP on Fastways

 

Khaira said that the party had decided to write to the Union Minister of Finance, Arun Jaitley demanding a probe by the Economics Offences Wing of CBI,  besides seeking the immediate arrest of Gurdeep Singh and others as per Section 91 (1) read with Section 89 (1) (i) and (ii) of the Finance Act, 1994. If action was taken than AAP will approach the High Court, Khaira said.

The Act, as amended, provides for the arrest of any one evading Service Tax exceeding Rs 50 Lakh. In case of Fastway Company (and its contracted Cable Operators), the evasion of Service Tax in Punjab alone is more than Rs 800 Crore.

Sandhu said that while on paper, there are a few dozen Multi-System Operators (MSOs) in Punjab but in actual fact, Fastway Company held near complete monopoly, which had enabled it to impose media emergency as and when desired. Most MSOs were being taken over through its sister concern, Creative Cable. Thus, Fastway is able to, on bidding of the Deputy CM, control or block telecast of various channels like Day & Night News earlier and Zee Punjab, Haryana and HP now. Fastway has a total of 14 Companies and its presence in Punjab and nearby states is predominant.

Talking about the Income Tax evasion, Sandhu said that the total TDS/ IT evasion comes to more than Rs 1850 Crore in Punjab. This is considering a total of 8,000 Local Cable Operators (LCOs) in Punjab (as per Fastway’s own admission to Hindustan Times of April 4, 2015, 6500 are under it). Against this, the IT is being paid on only 220 or so LCOs, which is a gross under-reporting of subscriber base.

The total service tax evasion in Punjab is to the tune of Rs 811 Crore. Against a population of 2.79 Crore in Punjab, there are about 40 Lakh cable connections (though in Chandigarh the density of cable connections is higher than in Punjab). On an average the Cable Operator charges Rs 250 per connection per month, including Service Tax (12.36 – 14 per cent). By this calculation, the annual collection towards cable connections would be Rs 1195 Crore and the amount of Service Tax collected should be Rs 131 Crore. Against this only an amount of Rs 27 Crore was being reported. Even this amount collected and passed on to Fastway was not being deposited regularly, which was a criminal act. Unfortunately, in most cases, the cable operators are on the receiving end. While there are at least 6500 declared cable operators under Fastway in the state, only 550 are registered and of these only 200 pay Service Tax.

Sandhu alleged that in both cases (IT/ TDS and Service Tax), the connivance of certain Central Excise & Income Tax Department officials was apparent. For example, the Service Tax Department has issued notices to only 1100 cable operators for tax evasion of Rs 253 Crore. What about the remaining 6900 Cable Operators in Punjab, he questioned. Records of Fastway Company seized by the Enforcement Wing of the Service Tax Department at Ludhiana in 2012 had still not been examined and could become time-barred after five years. As an example, the Show Cause Notice issued by the Office of Joint Commissioner, Central Excise Commissionerate, Ludhiana dated October 22, 2014 could be pursued. What is significant is that even in this, in order to help the defaulters, a vital clause (Section 73-A) of the Finance Act, 1994, had not been invoked, which provided for Service Tax collected for government to be deposited in treasury at the earliest. All this was happening despite specific inputs and instructions from the Director General (Audit), Central Excise dated 29.8.2014.

Sandhu further added that Fastway Company and most Cable Operators in contract with it were evading Entertainment Tax and thus defrauding the Punjab State Exchequer. Since 2009, this amount works out to be at least Rs 82 Crore. Only 2 per cent of the Local Cable Operators were paying Entertainment Tax, which was Rs 15,000 per Local Cable Operator (LCOs) per year. As per RTI information, only 150 Cable Operators were paying Entertainment Tax against the actual figure of 8,000 LCOs provided by Fastway Company.

Besides, Punjab State Power Corporation Ltd is not charging “Pole Charges” of Rs 100 per pole per year for allowing the cable operators to use its poles for cable. Approximately, 325000 poles were being used for cable wires. The evasion of charges during the past eight years comes to Rs 26 Crore, stated Sandhu further adding that under losses, these officials of the Power Corporation could not dare to ask for these charges.

Khaira said that it was also learnt that Fastway had laid Optical Fibre Cable along with the Reliance in a questionable manner without paying Cable laying/ Road Cutting Charges (Rs 500 per meter of road and Rs 1,000 per manhole) for more than 1100 kms. By this, Fastway and its subsidiaries owe about Rs 70 Crore to the Municipalities/ PWD and Irrigation Department in Punjab. Instead of recovering this amount, the SAD-BJP Government on the bidding of the Deputy CM is facilitating the operation. Punjab Government’s deal with Reliance should be made public. Does it provide for Fastway Company to lay its pipes along with Reliance, he questioned?

Khaira further stated that it was also learnt that in a number of cases, pipes and cables of Fastway and its allied companies had been laid under Railway Tracks and Irrigation channels without proper permission and submission of maps (and payment), as required, which could pose a serious security hazard. All such records should be seized.

Khaira further stated AAP severely condemns the undeclared emergency being imposed on electronic media by the Badal government. AAP demands immediate withdrawal of the blackout of Zee Punjabi network from the cable network in the state by the said Fastway cable mafia operating under the patronize of the Deputy CM Sukhbir Badal, he said.

 

 

 

 

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