Cable TV

Siti Cable denies fraud as Delhi govt levies penalty for entertainment tax evasion

NEW DELHI: While ?vehemently? denying any allegation of tax evasion, multi system operator (MSO) Siti Cable late on Tuesday evening said that in any case the matter was sub judice because it had challenged the levy of entertainment tax and vires of the Delhi Entertainment and Betting Tax Act 1996 in the Delhi High Court.

Noting that it had been depositing the entertainment tax regularly on the basis of collections, Siti Cable also said in an official statement that "the company had not yet received any official communication/ notice about any such order being passed by the Entertainment Tax Department, Government of Delhi."

The matter is pending vide its Writ Petition of 2014, Siti Cable said. 

The statement said, ?The company has come to know from public sources regarding the alleged ex-parte order issued by the Delhi Government, directing Siti Cable Network Ltd. to deposit Rs 33.12 crore as outstanding entertainment tax including interest and penalty. In this context, the company vehemently denies the allegation of tax evasion and would like to clarify that it has been depositing the entertainment tax regularly on the basis of collections. It has already challenged the vires of the Delhi Entertainment and Betting Tax Act, 1996 vide its Writ Petition being No. 427 of 2014, which is subjudice before the Hon?ble Delhi High Court.?

Earlier in the day, sources in the Delhi government revealed that Siti Cable Network, an Essel Group Company, with Subhash Chandra as its chairman of board of directors and CEO, had been directed to deposit Rs 33.12 crore as its outstanding entertainment tax for two years along with interest and penalty within 15 days, by 22 April.

Sources said that the MSO had defaulted in payment of entertainment tax since April 2013.

The company was learnt to have committed a serious illegal act of tax evasion by duping the government despite having collected the amount in the name of taxes from its innocent customers. 

This company has been collecting entertainment tax from 5,36,616 customers at the rate of Rs 20 per month through local cable operators.

In the financial year, 2013-14, Siti Cable was found to have collected around Rs 13 crore as entertainment tax from its customers but only deposited Rs 4.63 crore as entertainment tax for this financial year. The allegation therefore was that it had defaulted by not depositing the remaining Rs 8.32 crore, which should have been deposited on a monthly basis in the government exchequer.

Taking cognizance of the fraud, the Delhi government levied a 100 per cent penalty of Rs 8.32 crore and an interest of Rs 3.06 crore under the relevant provisions of the Delhi Entertainments and Betting Tax Act 1996, sources said.

The complete assessment including additional tax, penalty and interest for the financial year 2013-14 is Rs 19.71 crore.

The Delhi Government alleged that the MSO had defaulted during the next financial year of 2014-15 as well. The government has assessed the tax, interest and penalty for 2014-15 at Rs 13.41 crore.

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