Comprehensive Checklist for SSCA in respect of Assessment of License Fees and Spectrum Usage Charges

Objective Records maintained in CCA Audit Checks in CCA

To check and confirm that Records submitted by the licensees- Quarterly Copies of license agreements/amendments thereon
requisite instruments / Reports certified by the statutory auditors of the should be kept on record. Audit should ensure
documents / vouchers etc were Company for computation of Gross Revenue that the Licensees are submitting their audited
examined by Controller of and claim for deductions in Annexure III of the financial statements in time and the claims are
Communication Accounts license agreement (Adjusted Gross Revenue submitted by the TSPs in support of deduction of
(CCAs) for effective verification statement). This has to include notes on IUC, roaming and other deduction claims are
of deductions claimed and accounts, Auditor's comments on the duly supported by authentic vouchers.
assessment of GR, as per the accounts/management's reply thereto, schedules
directions issued by Department relating to income/other income and finance
of Telecommunications (DoT) expenses, income netted off. Details of
and are kept on record. miscellaneous items of revenue not disclosed but
required to be included for compilation of Gross
revenue for the purpose of payment of LF/SUC
as per License agreement. List of Licensees
maintained by CCA.
Revenue share Register/License agreements Audit to check and confirm the validity of the license
and other documents/Report furnished by the for the period of accounts submitted by the licensee.
Licensee It should be ensured that the terms and conditions in
the License Agreement/Amendments/DoT orders
have been correctly implemented in the assessment
of LF and SUC.
 Whether a database of licensees who are liable to pay Audit should verify the List of names of Licensee,
License Fee and SUC is being maintained Dot instructions relating to Auction, Bids, Band in
MHz, No of Carriers, Spectrum held in MHz,
Allotment Date, License type, License No and Date,
Valid upto, Merger/ Termination/ revocation, if any.
Validity of the agreements/allotments etc must be
checked along with all details regarding holding of
spectrum by the Telecom Service Providers (TSPs)
for respective service areas are kept up to date
Instructions issued by DoT from time to time To examine cases of merger, suspension,
maintained in Order/ Ruling files of LF Wing of CCA, revocation, termination and surrender of license if
LF/SUC assessment files of TSPs, Conditions in the any.
License Agreement
Scrutiny of Documents & Files relating to deduction verification of each TSPs, Audit to verify that the CCAs have carried out the
Verification of deductions Proof of documents submitted by TSPs. Standard verification of deduction for various licenses in
Operating Procedure 2022, DoT instructions issued by respect of deductions claimed by the licensee
DoT from time to time and Report on verification of properly in accordance with the license agreement
deductions claimed in the AGR for the relevant year in and DoT instructions issued from time to time.
respect of TSPs/ISPs etc.
Deduction verification files of TSP/ Proof documents Audit to verify whether the deductions allowed for
submitted by TSPs. Reports on deduction verification various licenses are done correctly and documents in
that are generated through SARAS. support of deductions claimed are available. Audit
to analyse the provisions of various License
agreements/service authorisations that provide the
framework within which the deduction claims and
verification work is carried out.

Deduction verification files of each TSPs and records Audit to verify that the notifications/ demand orders/
maintained at CCA offices for deduction of show-cause notices to licensees are sent on time
verification. Reports (in SARAS)/ letters relating to vide email/SMS through SARAS. Details of
demand notices issued to TSPs. verification claims completed/pending may be
looked into by audit and confirm that all DVRs for
all years have been sent by CCA to DoT Hqrs for
Final assessment of License Fees.
Report of Deduction verification sent to LF wing of DoT Audit to verify that the process of preparing
 by CCA for the relevant year. Report of Deduction Provisional Quarterly DVR has been completed
verification generated through SARAS. within the reasonable period of receipt of Audited
financial statement/ reply of TSP to Objection Report
cum Show Cause Notice. Audit to verify that the
deduction claimed/ disallowed amount is the same as
finally communicated to TSP.
To verify the process of Audited quarterly statements of Revenue and license Audit to verify the accuracy of Gross revenue in the
assessment of Provisional fees (Adjusted Gross Revenue (AGR)/ Applicable AGR statement in compliance with the terms and
LF and its calculation so Gross revenue (ApGR)) for the relevant financial year. conditions of the License agreement, instructions of
as to ensure the correct Annual financial accounts/ Reports/ Reconciliation DoT. Audit should also see that TSPs are
realization of revenue by statements, Conditions in license electronically submitting Audited quarterly
the CCA. agreements/Amendments/DoT orders defining Gross Statement of Revenue (AGR) along with deduction
revenue for each category of license. claims by online mode through SARAS on actual
basis.
Audit in System for Assessment of LF Revenue and To ensure whether assessment and accounting of
Spectrum Usage Charges (SARAS) software. LF/ SUC is made operational and correctly done
by CCA through SARAS.
LF Agreements, DoT instructions issued from time to Audit to verify that CCA calculates License fee
time, Verification of deductions file of each TSP. correctly for NLD, ILD, Commercial VSAT,
Corresponding files maintained at CCA PMRTS, Internet Service Providers (with telephony)
and New Internet licences based on Audited AGR
and financial statements submitted by the licensees.
Audited quarterly statements of Revenue and license fees Audit to verify the Telecom Reforms 2021, which has
for the relevant financial year, DoT instructions issued effected many changes in financial conditions and
from time to time. compliance, which includes, amongst others, the
exclusion of non-telecom revenue from Gross
Revenue (GR) to arrive at Applicable Gross Revenue
(ApGR), for purposes of calculation of License Fee &
Spectrum Usage Charges, changes in Interest rate,
penalty and interest on penalty on delayed payment of
License fee or any other dues etc are implemented
correctly in CCA.
To verify the Assessment of Audited AGR along with supporting documents forming Audit to verify the Provisional assessment and final
Spectrum Charges part of Audited accounts, SUC assessment files of TSPs assessment of SUC including MWA/MWB charges
was carried out on the basis of Audited AGR / ApGR
 furnished by the licensee on time. Since the rate of
Spectrum and allocation of spectrum are done
separately, Audit has to ensure that the assessment of
SUC has been done separately for Main Radio
Spectrum and Backhaul (MWA & MWB) and has
appropriately calculated their rates.
AGR/Applicable Gross Revenue (ApGR) of each TSP Audit has to confirm that the AGR taken by CCA for
for the relevant years, SUC Assessment files and related the SUC assessment matches the AGR finalized by
files maintained in CCA. DoT
Documents/ AGR statements furnished by the licensee at Audit to verify the Audited AGR/Applicable Gross
CCA Offices. Revenue (ApGR) for the purpose of SUC after
excluding revenue from non-telecom activities was
properly taken for respective service authorizations of
the licensee prior to and after the introduction of
reforms in October 2021.
Report on Assessments of LF & SUC / demand notes Audit to analyse the assessment of LF & SUC and
generated/issued by CCAs through SARAS. ensure that the same was done correctly in line with
Departmental instructions on achievement of laid down the license agreement and DoT instructions. Audit
objectives through SARAS. should ensure that the manual calculations in the file
and assessment reports/ demand notes
generated/issued by CCAs through SARAS are the
same.
SUC Assessment files of each TSP / DoT instructions Audit to determine whether wireless charges (on
MW access / BB / GSM/ CDMA spectrum) are being
collected at rates applicable for spectrum allotted to
the licensee in the service area.
Adjusted Gross Revenue (AGR) of 2015-16 and the DoT introduced Floor amount in 2016-17. The SUC
AGR of the relevant year, Statement showing the payable by the operators during 2015-16 at weighted
calculation of MWA/ MWB for assessment of SUC of Average of SUC for 2015-16 considering spectrum
TSP for the relevant year. acquired through auction (in accordance with Notice
Inviting Application No. 1000/06/2016-WF
(Auction) dated 12th August 2016) and excluding
2300 Mhz/ 2500 Mhz band spectrum
acquired/allotted prior to 2015-16 is to be treated as
Floor amount of SUC.
 Audit to ensure that the Floor amount computation is
used accurately in the calculation of Spectrum Usage
charges by comparing the AGR of 2015- 16 and the
relevant year.
Reports on results of verifications conveyed to DoT There must be a minimum/presumptive AGR that is
Headquarters by CCAs and related files and documents. not less than 5% of the bid value in order to calculate
Annual audited statements/reports/notes on accounts etc. the cost of using the spectrum. Audit to verify the
Submitted by service providers. Clause 20 of Unified minimum / presumptive AGR or the actual AGR
License agreement and amended from time to time. whichever is higher, is used correctly in the
calculation of Spectrum usage charges.
DoT instructions issued by DoT from time to time In the case of the intra-service area merger of CMTS
maintained in order/ Ruling files in LF Wing of CCA, and UASL, an audit may confirm that following the
LF/SUC assessment files of TSPs, Conditions merger of licences in a service area, the post-merger
licensee entity shall be entitled to the entire amount of
spectrum held by the merging entities.
Final AGR sent from LF wing of DoT, Report on SUC After completion of the final assessment of the
Assessment by CCA License fee, Final AGR is sent from the LF wing to
the CCAs for computation of the Final SUC
Assessment. Audit has to verify whether CCA has
completed the SUC Assessment in time as per the
extant orders after making the adjustments
correctly in line with the final AGR sent by LF wing
of DoT for the relevant financial year.
SUC Assessment files of TSPs Audit to verify that CCA has done the Final
SUC assessment / Reassessment of
SUC including MWA/MWB charges in
accordance with AGR that was finalised by the LF
wing of DoT. Audit has to confirm that the AGR
taken by CCA for the SUC assessment matches the
AGR finalized by DoT.
Report regarding additional Show cause demand notice Audit to confirm that any additional LF/SUC have
issued by CCA to TSPs. Relevant records/files been recovered from TSPs in accordance with the
maintained at DoT and CCAs for TSPs AGR that DoT HQ finalized and communicated
following their assessment.
 Collection Register/files, returns sent to DoT certified Payments are being made through SARAS from the
affidavits by a representative of the Licensee, challans for year 2019-20, ie., after implementation of SARAS for
payment with details of the instrument of payment earlier periods it was done through BharatKosh
(cheque /DD), audited quarterly AGR statements etc. portal. Audit to confirm that payments have been
available for LF and SUC Payments from DoT /CCA received based on actual AGR, for all the Quarters
office. Relevant conditions in the license agreements for the relevant year. Audit to verify that the CCA
specifying the required documents and instructions has levied penalty and interest as per license
issued by DoT vide OM no.100-56/2004-WFD dated conditions (Financial conditions) as amended from
11/11/2014. Agreements with banks and details of time to time, in case of short payment/delayed
remittance to bank/ accounting as available in bank payment of license fee by the ISP licensee.
vouchers at CCA office.
To check Licence Fee/ Collection Register / files, PFMS, e-Lekha and daily/ Audit to analyse that the revenue share (LF/SUC) is
Spectrum Collection collection reports sent to DoT Hqrs. Details of remittance collected on time and at the rates applicable from
to bank/ accounting as available in bank vouchers. time to time and the same has been remitted to the
Government account/ Consolidated Fund of India,
promptly.
Collection Register of license fee/ Spectrum fee and Audit to verify that quarterly license fee payments are
Monthly State of Work Report (SWR) to DoT Hqrs received through SARAS with Bharatkosh Gateway
showing details of revenue collected ( SUC and LF), and same are accounted automatically in PFMS
Revenue share register maintained at CCAs and copies correctly and on time. Audit to confirm that
of bank scrolls, Reports relating to periodical BharatKosh portal is linked with SARAS to view the
inspections of CCAs being conducted by DoT Hqrs on details of payments for all periods
spectrum collection.
Collection Register of License Fee/Spectrum Usage Audit to confirm that the revenue sharing payments
Charge, Collection files for each TSP, Reconciliation made have been recorded under appropriate Heads of
reports sent to DoT Hqrs and Revenue share register. Accounts apportioning 5% of the AGR to Universal
Access Levy and the rest to License Fee.
Collection Register, Reports sent to DoT Hqrs, To verify that reconciliation of receipts of spectrum
Collection files and SUC assessment files of each TSP. charges is being done correctly and collection and
Periodic reports/ returns on collection of revenue share booked figures under relevant heads of cash account
sent to DoT Hqrs along with copies of AGR and current is carried out in monthly/quarterly basis.
affidavit.
To check the Bank Monthly statement/ quarterly/ six monthly statement Audit to verify maintenance of Performance and
Guarantees regarding the status of renewal of Bank Guarantees. Financial Bank Guarantees of the above-mentioned
Register of Bank guarantee. Monthly statement of licenses and ensure encashment for non-renewal and
 Renewal of Bank Guarantee sent to the office of the non-fulfillment of terms and conditions of
Controller General of Communication Accounts respective Licence Agreements have been
(CGCA). undertaken by CCA as per License agreements and
DoT instructions
issued from time to time.
Records related to TSP-wise BGs maintained at CCA/ Audit to confirm that current Bank Guarantees have
Bank Guarantee file/ Reports sent to DoT. been correctly rationalised following the
Government’s reformative measures in October 2021.
The PBGs and FBGs of existing Licensee are revised
as per DoT orders. Audit to ensure that Bank
Guarantees that are furnished or required due to any
Court order or Bank Guarantees which are the subject
matter of any Litigation, do not fall within the
Rationalization of Bank Guarantee.
Whether the Bank guarantees are renewed by the
TSPs and whether the CCA has obtained
confirmation from the concerned Banks regarding the
Bank guarantees.
Audit to verify whether the Bank guarantees encashed
by CCA has been re-furnished by the TSP
immediately
The above check list is based on the orders/circulars/instructions issued by DoT with respect to LF and SUC only. The audit team may use
these as guidelines and conduct audit with reference to the circulars/instructions issued by CCAs/DoT/CGCA from time to time.