Bharti Airtel (Airtel) has terminated the Call Center Master Services Agreement with Karvy Data Management Services Limited due to breach of provisions of GST Law and terms of agreement.
The decision comes after Airtel sent many notices, the latest being May 21, through email — setting out several defaults of serious nature on part of Karvy and calling upon Karvy to rectify all the defaults and submit compliance thereof with documentary proof — within a period of seven days from the date of issue of the said notice.
Airtel alleged that Karvy has failed to deposit the taxes with the government as per law, including the taxes collected from Airtel, which divests Airtel of its right to claim the Input Tax Credit in respect thereof.
‘Breach of terms of agreement’
Karvy also falsely represented to Airtel that it had taken corrective action by uploading invoices and rectification of GST return, whereas, as per recent report extracted from GSTN portal, it appears that no such action has been taken by Karvy and, in fact false information and documents were shared by Karvy to mislead Airtel.
“Several addendums were executed between the parties from time to time and Airtel issued specific orders to Karvy from time to time, including Global Blanket Purchase Agreement dated July 01, 2019 where under Karvy had been providing the ordered services from its call centre set up at Tiruchirappalli, Tamil Nadu,” Airtel said in the notice.
However, no response to the notice has been received from Karvy, it said. BusinessLine has seen the notice. Karvy is one of the several vendors providing customer care service for Airtel, through its BPOs across India.
Apart from Karvy, Airtel has other BPO partners such as Convergence, Aegis, iEnergizer IT Services and Altruist Technologies. When contacted, Airtel, the company declined to comment.
“Karvy has not only acted in blatant breach of the terms of agreements, but has also acted in breach of applicable laws and has, among others, failed to maintain the necessary registration under the applicable Goods and Service Tax (GST) legislation, breached its legal obligation to deposit due taxes with the government in accordance with law,” Airtel said in the notice.
The company also failed to discharge its legal obligation to pay the due wages to its employees and it was only upon Airtel’s intervention by making certain advance payments for the purposes of payment of wages that the due wages were paid by Karvy to its employees for the months of March and April.
Therefore, in exercise of its rights under Article 13 of the Call Centre Master Services Agreement dated July 01, 2017 and all other enabling rights, Airtel terminated the Agreements with immediate effect.
As a sequel to the termination of agreements, all rights, authorities, and access made available to Karvy by virtue thereof shall cease immediately, Airtel added in the notice.
—The Hindu Business Line