Department of telecommunications (DoT) has is set to tell the comptroller and auditor general (CAG) that it cannot interfere in policy matters. In a draft note for CAG, DoT has defended its decision to set-off Rs 5,474 cr that it received from telecom operators, against fee for new licences.

In 2013, DoT had set off entry fees paid by the telecom service providers against spectrum won in an auction.

“Empowered Group of Ministers (EGoM) had recommended on the Principal of equal restitution, a set off may be allowed against the earnest money and the payment due in the event of spectrum being won in the auction,” said a DoT draft note for CAG. “The total amount was limited to the total entry fees by the company for its license which have been quashed by the Supreme Court.”

                               

Following EGOM recommendations, DoT has set off an amount of Rs 5,474 crores to telecom companies. The DoT had adjusted Rs 1658 cr for Telewings, Rs 1506 cr for Videocon Telecommucations, Rs 1626 cr for Sistema Shyam, and Rs 684 cr for Idea Cellular.

CAG had raised objections to it and said that it was loss to the government. It had sought DoT’s reply before preparing its Final Audit Report.

                           

Draft note also points out that the issued dealt by CAG were of policy and legality. Issues of policy can’t be dealt with by Auditor and issues of legality can only be dealt by the Courts.

DoT also says that decision of set off is very much in conformity with the direction of the Supreme Court as the apex court had allowed the quashed license to continue to operate and participate in the auction.

The Supreme Court’s intent was to avoid disruption of services and government has towed the similar line with the objectives of encouraging the quashed licensees to participate in the auction and win the spectrum. DoT has requested CAG to examine the case in entirety.