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The Directorate of Revenue Intelligence has demanded that six telecom companies — including Vodafone, Airtel and Idea — pay over ₹427 crore for allegedly evading anti-dumping duty while importing digital transmission products from China and Israel.
Except Vodafone, other companies which have been served the demand notice have paid (partially or fully) up. The imported transmission products were for Synchronous Digital Hierarchy (SDH), a technology standard through which data is sent over optical media.
A senior Finance Ministry official told BusinessLine that Vodafone has been asked to pay ₹333.34 crore, Airtel ₹46.43 crore and Idea ₹9.38 crore. Over and above the said amount, the telecom companies have also been asked to pay interest.
As Vodafone has not paid any amount, the matter would now be taken up for adjudication, the official said. Dumping refers to a situation when goods are exported by a country to another at a price lower than its normal value.
The show cause notices to the telecom companies were issued between December 23 and January 5. Airtel has paid ₹26.17 crore, while Idea has deposited ₹4.70 crore. Both companies, and the other three firms, have agreed to pay the remaining amount soon.
When contacted, both Vodafone and Airtel refused to comment, while there was no response from Idea. Business Line could not verify the names of the three other companies.
Synchronous Digital Hierarchy (SDH) is a digital transmission equipment, which enables transmission of multiple data on single line.
A domestic manufacturer Tejas Networks had filed an application with the Directorate General of Anti Dumping (DGAD) alleging dumping of SDH equipment coming from China and Israel.
After a thorough investigation, provisional anti-dumping duty was imposed in December 2009 followed by final anti-dumping duty in December 2010. The rate of final duty varied from 7 per cent to 266 per cent, depending on the combination of producer and supplier.
The official said there was specific information available about telecom companies misrepresenting the SDH so as to avoid anti-dumping duty. Accordingly, the Mumbai zonal unit of the DRI undertook the investigation.
The agency found that the telecom companies had misrepresented the SDH equipment as either ‘non-SDH’ or as ‘part of other equipment.’ Based on this, show-cause notices were issued and the demand for duty was made.
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