Mumbai Mirror; Anand Holla; Tuesday, September 28, 2010;
RInfra deny allegations they pay state only a percentage of the money collected as tax
A petition filed recently in the Bombay High Court questions the veracity of Reliance Infrastructure Limited’s (RInfra) books. The petition alleges that the Anil Ambani-headed enterprise, which supplies electricity to Mumbai’s suburbs, is paying the state only a percentage of the money it collects as tax in every electricity bill, and is making at least Rs 200 crore a year in the process.
RInfra has denied the allegations, saying there can be no discrepancies in payments as their accounts are audited by the state’s Public Works Department (PWD), while state government officials say that while it was impossible for them to keep a tab on exactly how many units
were used, they would look into the matter.
Intrigued by a header in the break-up of his electricity bill – ‘Maharashtra government tax on sale of electricity’ – a Juhu resident, Manoranjan Roy, filed an application under the Right To Information Act (RTI) asking how much money RInfra (earlier Reliance Energy) had paid the government in the last six years. RInfra has 27 lakh consumers in Mumbai and this tax is calculated at the rate of 23 paise per unit’s consumption (for industrial and commercial consumers) and 15 paise per unit’s consumption (for others).
In reply to the RTI query, the PWD responded with what Roy calls “surprisingly modest figures”. The reply stated that RInfra had paid the government between Rs 46.25 crores (in 2003-04) and Rs 122.81 crores (in 2008-09; See Box). “If you go by these figures, the tax paid by each consumer will be between Rs 14 to Rs 39, which can not be the case,” Roy says.
Roy, 41, goes on to explain why the numbers don’t add up.
He says the minimum average tax collected per consumer can be taken at Rs 100 per month, basing his calculations on the several categories based on consumption – from residential to industrial. At this average of Rs 100, Roy says that tax taken from 27 lakh consumers should yield Rs 27 crores per month, which comes to Rs 324 crores for the year.
He also justifies why Rs 100 is a fair average figure. “Data shows that more than a lakh consumers come under the industrial, high tension or hoardings categories,” he says. “These have extremely high usage and pay exorbitant tax as part of their bills.” These three categories (apart from commercial entities which account for over five lakh consumers) consume much more electricity than the 20 lakh residential and high residential categories, he says. “For instance, an industrial unit running up a bill of Rs 2 lakh, or a commercial outlet with a bill of Rs 50,000, dole out a hefty tax amount at 23 paise per unit. If such amounts are factored in, it offsets the Rs 40 or Rs 80 as taxes from an average resident’s bill,” he says.
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| The break-Up |
“While RInfra is paying anywhere from 46 crores to 122 crores as taxes every year for the last six years, according to more realistic numbers it should have been paying at least Rs 324 crores per year,” Roys lawyer Anand Jondhale said. “RInfra has paid the government Rs 679 crores in the last six years as taxes, when it should have paid Rs 1944 crores keeping 100 as an average. Even if you take Rs 70 as an average, the amount they should have paid comes to Rs 228 crores per year and Rs 1368 crores in six years.”
Saying that they were unaware of Roy’s petition, an RInfra spokesperson vehemently denied any lapse in RInfra’s payment to the government. “The entire tax amount has been duly paid to the state government every year and there is no question of a massive deficit,” he said. “All this tax is audited by the government’s PWD and the Comptroller and Auditor General audit is also carried out every financial year. The audits undertaken so far reflect that all payments have been correctly made to the Government Treasury.”
Tanaji More, Electrical Duty Inspector at PWD, said, “We receive detailed monthly statements from RInfra that provides the entire break-up of units sold under different categories and the tax paid. We ensure that they duly pay the entire amount and only then is the audit carried out.” However, when prodded, More admitted that there was no way for them to verify whether all data provided by power companies such as RInfra, TATA or BEST was completely authentic.
Manish Waghrkar, Deputy Director, Office of the Chief Engineer, PWD’s Accounts department, said, “We always thoroughly check the tax amount paid by RInfra against the number of units they sell, and have found their figures to be correct. Nevertheless, we will look into this matter.”
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