The Delhi government has directed SITI Cable Network Limited to deposit Rs 33.12 crore as outstanding entertainment tax for two years, along with interest and penalty, within 15 days. The SITI Cable Network Limited is an Essel Group Company with Subhash Chandra as the chairman of its board of directors and CEO. The government has alleged that the multi-system operator (MSO) company, which provides digital cable services in Delhi, was found indulging in “major entertainment tax fraud” since April 2013. [related-post] The statement issued by the government said, “It has been found that this company has 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, through its local cable operators, has been collecting entertainment tax from 5,36,616 customers at the rate of Rs 20 per month.” Senior government officials said the assessment has been done for the financial year 2013-14 and 2014-15. “The MSOs have not submitted the tax as yet. We have 15-16 MSOs in the city and the four major players are yet to submit the tax returns,” the official said. The statement further said, “In the financial year 2013-14, SITI Cable has been found to have collected around Rs 13 crore as entertainment tax from customers. However, it only deposited Rs 4.63 crore as entertainment tax for that financial year. It is clear that this company simply pocketed the remaining Rs 8.32 crore which should have been deposited on a monthly basis in the government exchequer.” Calling this a financial fraud, the government has levied a 100 per cent penalty of Rs 8.32 crore and an interest of Rs 3.06 crore under the provisions of the Delhi Entertainments and Betting Tax Act, 1996. “The complete assessment including additional tax, penalty and interest for the financial year 2013-14, which this company now has to pay to the government, stands at Rs 19.71 crore. For financial year 2014-15, the assessment is of Rs 13.41 crore. SITI Cable has been directed to pay a total of Rs 33.12 crore to the government before April 22,” the official said. A statement from SITI Cable said, “The company has come to know from 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 sub judice before the Hon’ble Delhi High Court. Further, the company has not yet received any official communication/ notice about any such order being passed by the Entertainment Tax Department.”
