Letter to BS: Relations between telcos and revenue dept unlikely to change

This refers to the editorial “Take the call” (March 19). The star-crossed relations between the telecom companies and the revenue department of the government are unlikely to change. In the retrospective tax issue, the Supreme Court was persuaded by the view that the business connection rule did not apply to capital transactions. Subsequently, the apex court held a similar view over revenue evaluation for taxation as that was the legal position arising out of the government’s own ham-handed construct. The court’s latest observations — on the government’s fresh submissions over adjusted gross revenue — have been also been severe.

The malady is quite basic — the inability to foresee the explosive impact of modern technology, both by service providers and the government. In 2004, the telecom companies had gross revenues pegged at Rs 4,855 crore and by 2015, it had jumped to Rs 2.37 trillion. The government, for its part, used law enactment to make up for its lack of foresight. Caught in a bind, the government must be ruing the ineptness of its blindsided babus.

R Narayanan, Mumbai

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