The government has decided to re-discuss the issue of tax demand against the loss-making Mahanagar Telephone Nigam Limited (MTNL). The operator was issued a tax notice as it taxable income for 2013-14 has increased on account of the proposed refunds by the government regarding pension support and surrendering of broadband spectrum.

In September 2013, the government agreed to refund about Rs 57 billion to MTNL for the surrender of broadband wireless access spectrum in the Delhi and Mumbai circles. Further, in December 2013, the government had also approved pension support of Rs 15 billion to the employees of MTNL, who shifted from the Department of Telecommunications. On account of these proposed refunds, MTNL’s profit for the assessment year 2013-14 has increased.

Due to the book profit of Rs 23.48 billion for 2013-14, MTNL made a payment of Rs 4.92 billion regarding its minimum alternate tax (MAT) liability, which the government had earlier agreed to refund. However, the government is now considering re-discussing the operator’s tax matter.