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REGD. No. D. L.-33004/99
The Gazette of India
CG-DL-E-27032026-271282
EXTRAORDINARY
PART III—Section 4
PUBLISHED BY AUTHORITY
No. 208]
NEW DELHI, TUESDAY, MARCH 24, 2026/ CHAITRA 3, 1948
TELECOM REGULATORY AUTHORITY OF INDIA
NOTIFICATION
New Delhi, the 24th March, 2026
The Reporting System on Accounting Separation (Amendment) Regulations, 2026
(02 of 2026)
F. No. M-6/(2)/2023-FEA-I.— In exercise of the powers conferred by section 36, read with sub-clause (i) of
clause (b) of sub-section (1), of section 11 of the Telecom Regulatory Authority of India Act, 1997 (24 of 1997), the
Telecom Regulatory Authority of India hereby makes the following regulations to amend the Reporting System on
Accounting Separation Regulations, 2016 (5 of 2016) namely:-
1. (1) These regulations may be called the Reporting System on Accounting Separation (Amendment) Regulations,
2026.
(2) They shall come into force from the date of their publication in the official Gazette.
2. For regulation 6 of the Reporting System on Accounting Separation Regulations, 2016 (hereinafter referred to as
the "principal regulations"), the following regulation shall be substituted namely:-
"6. Consequences for failure of the service provider to submit reports or furnishing of false report.-
(1) If any service provider contravenes the provisions of regulation 5, it shall without prejudice to the terms
and conditions of its licence or the provisions of the Act or rules or regulations or order made, or, directions
issued, thereunder, be liable to pay, by way of financial disincentive, an amount of twenty thousand rupees
for each day of contravention for the first seven days and, in case the contravention continues beyond seven
days, an additional amount of forty thousand rupees for each subsequent day of contravention beyond seven
days, subject to maximum of ten lakh rupees as the Authority may, by order, direct:
Provided that if a service provider contravenes the provisions of regulation 5 in two or more
consecutive years, it shall be liable to pay, by way of financial disincentive, an amount of fifty thousand
rupees for each day of contravention for the first seven days of the second and subsequent consecutive year
and, in case the contravention continues beyond seven days of that consecutive year, an additional amount
of seventy five thousand rupees for each subsequent day of contravention, subject to maximum of twenty
five lakh rupees as the Authority may, by order, direct.
(2) If the report furnished by the service provider under regulation 5 is false or if, in its report, the service
provider deliberately omits any material fact knowing it to be material, the service provider shall, without
prejudice to the terms and conditions of its licence, or the provisions of the Act or rules or regulations or
order made, or directions issued, thereunder, be liable to pay financial disincentive as under:-
+------+---------------------------------------------+--------------------------------------------+--------------------------------------------+
| SI. | Annual turnover of the service provider | Financial disincentive for | Financial disincentive for |
| No. | | minor violation | major violation |
+======+=============================================+============================================+============================================+
| 1. | Upto Rs. 500 Crore | Upto Rs. 25 Lakh | Upto Rs. 50 Lakh |
+------+---------------------------------------------+--------------------------------------------+--------------------------------------------+
| 2. | More than Rs. 500 Crore and upto Rs. | Upto Rs. 50 Lakh | Upto Rs. 1 Crore |
| | 5000 Crore | | |
+------+---------------------------------------------+--------------------------------------------+--------------------------------------------+
| 3. | More than Rs. 5000 Crore | Upto Rs. 1 Crore | Upto Rs. 5 Crore |
+------+---------------------------------------------+--------------------------------------------+--------------------------------------------+
(3) In case a service provider fails to pay the amount of financial disincentive under regulation 6 within the
period stipulated in the order for payment of financial disincentive, it shall be liable to pay simple interest on
the outstanding amount of financial disincentive, at a rate which shall be two percent above the one year
Marginal Cost of Lending Rate of State Bank of India applicable at the beginning of the financial year in
which last day of the stipulated period falls.
Explanation: For the purposes of this sub-regulation, a part of the month shall be reckoned as a full calendar
month for the purpose of calculation of interest and a month shall be reckoned as an English calendar
month.
(4) No order for payment of any amount by way of financial disincentive under this regulation shall be made
by the Authority, unless the service provider has been given a reasonable opportunity of representing against
the contravention of the regulations observed by the Authority.
(5) The Authority may waive the financial disincentive, impose a lower amount of financial disincentive or
classify as minor or major based on the merit in the reasons furnished by the service provider."
ATUL KUMAR CHAUDHARY, Secy.
[ADVT.-III/4/Exty./784/2025-26]
Note.1. - The principal regulations were published in the Gazette of India, Extraordinary, Part III, Section 4 dated the
10th June, 2016 vide notification number No. 16-02/2015-F&EA dated the 10th June, 2016.
Note.2 – The Explanatory Memorandum explains the objects and reasons of the Accounting Separation (Amendment)
Regulations, 2026.
EXPLANATORY MEMORANDUM
Background
1. The Telecom Regulatory Authority of India (hereinafter referred to as the "Authority" or "TRAI") has been
established under the Telecom Regulatory Authority of India Act, 1997 to regulate telecommunication services
and matters connected therewith. One of the main objectives of the Authority is to provide a fair and transparent
policy environment to promote a level playing field and facilitate fair competition. In pursuit of this objective
and to carry out its functions effectively and efficiently, the Authority needs financial and non financial
information which is used for regulatory decision making/analysis. The Audited Annual Financial Statements
i.e. Profit & Loss Account and Balance Sheet of a telecom service provider (TSP) provides only aggregated
information of the company as a whole whereas for regulatory purposes, licensed service area (LSA)-wise,
Service-wise and Product-wise disaggregated information is required, which can only be facilitated/provided by
the Accounting Separation Reports.
2. The disaggregated financial information provided by Accounting Separation Reports (ASR) is required for
regulatory purposes such as analysing costs, revenues; capital employed in major areas of an operator's
business, measuring financial performance, and profitability of various products and services. It also helps in
identifying cross subsidisation practices, predatory pricing and anti-competitive behaviour of the TSPs. Further,
the Accounting Separation Reports of the TSPs are very significant from the regulatory perspective in the multi
operator, multi service environment and are being used by the Authority for different regulatory exercises such
as determination of Interconnection Usage Charges (IUC) for Voice & SMS, carriage charges, valuation of
spectrum and fixation of Roaming charges, Domestic Leased Charges & International Private Leased Circuit
Charges besides inter-operator comparison of costs, revenues and investments etc.1
3. Two decades back, the Authority had issued the "Reporting System on Accounting Separation Regulation,
2004" on 23rd February, 2004. Subsequent to the implementation of ASR 2004, many developments took place
in the telecom sector that had an impact on the information that the Authority needed as well as on the manner
in which such information was to be furnished by the service providers.
4. In order to address these above requirements and changes, the Authority notified “The Reporting System on
Accounting Separation Regulations, 2012" on 10th April 2012 by repealing "The Reporting System on
Accounting Separation Regulation, 2004”. An amendment to this regulation was also issued on 15th October,
2012 wherein clause for levying financial disincentives on the service providers was introduced for non-
compliance of the provisions of the regulations.
5. During implementation of ASR 2012, several service providers highlighted operational and reporting
difficulties. Taking note of these concerns, and after detailed stakeholder consultations, the Authority reviewed
the framework and subsequently notified the Reporting System on Accounting Separation Regulations, 2016.
1 https://trai.gov.in/sites/default/files/2024-11/Accounting_Separation_Regulations_2016Eng10Jun2016.pdf
The primary objective of ASR 2016 is to ensure that service providers furnish consistent, accurate, and reliable
information to the Authority.
6. The provision for financial disincentives under ASR was introduced as a compliance mechanism, not as a
revenue measure. Financial disincentives serve to ensure timely submission of reports and correctness of
information, which are critical for regulatory decision-making. In the absence of such deterrence, delays or
inaccuracies in ASR submissions could undermine regulatory analysis, distort market assessment, and weaken
the effectiveness of regulatory oversight.
Draft Accounting Separation (Amendment) Regulations, 2025
7. With the intent to amend relevant regulatory provisions to strengthen the effectiveness of financial
disincentives in ensuring regulatory compliance, the Authority came up with this draft Accounting Separation
(Amendment) Regulations, 2025. The draft consultation involved prescribing a maximum ceiling,
implementing financial disincentive in a graded manner in consonance with gravity of contravention, and
imposing interest on default in payment of financial disincentive.
8. The Authority issued the draft Accounting Separation (Amendment) Regulations, 2025 on 16.10.2025 on
TRAI's website for public consultation.
9. The draft proposed the following provisions on financial disincentive:
"6. Consequences for failure of the service provider to submit reports or furnishing of false report - (1) If
any service provider contravenes the provisions of regulations 5, it shall without prejudice to the terms and
conditions of its licence or the provisions of the Act or rules or regulations or order made, or, directions issued,
thereunder, be liable to pay, by way of financial disincentive, an amount of twenty thousand rupees for each day
of contravention for the first seven days and, in case the contravention continues beyond seven days, an additional
amount of forty thousand rupees for each subsequent day of contravention beyond seven days, subject to
maximum of ten lakh rupees as the Authority may, by order, direct:
Provided that if a service provider contravenes the provisions of regulation 5 in two or more consecutive
years, it shall be liable to pay, by way of financial disincentive, an amount of fifty thousand rupees for each day
of contravention for the first seven days of the second and subsequent consecutive year and, in case the
contravention continues beyond seven days of that consecutive year, an additional amount of seventy five
thousand rupees for each subsequent day of contravention, subject to maximum of twenty five lakh rupees as the
Authority may, by order, direct.
(2) If the report furnished by the service provider under regulation 5 is false or if, in its report, the service
provider deliberately omits any material fact knowing it to be material, the service provider shall, without
prejudice to the terms and conditions of its licence, or the provisions of the Act or rules or regulations or order
made, or directions issued, thereunder, be liable to pay, by way of financial disincentive, an amount not exceeding
one percent of its turnover, as the Authority may, by order, direct.
(3) In case a service provider fails to pay the amount of financial disincentive under this regulation within the
period stipulated in the order for payment of such financial disincentive, it shall be liable to pay interest on the
outstanding amount of financial disincentive, at a rate which shall be two percent (2%) above the one year
Marginal Cost of Lending Rate of State Bank of India applicable at the beginning of the Financial Year in which
last day of the stipulated period falls.
Explanation: For the purposes of this sub-regulation, a part of the month shall be reckoned as a full calendar
month for the purpose of calculation of interest and a month shall be reckoned as an English calendar month.
(4) No order for payment of any amount by way of financial disincentive under this regulation shall be made by
the Authority, unless the service provider has been given a reasonable opportunity of representing against the
contravention of the regulations observed by the Authority.
(5) Provided further that the Authority may waive the financial disincentive or impose a lower amount of
financial disincentive where it finds merit in the reasons furnished by the service provider;
10. Stakeholders were invited to submit their comments on the draft Regulation by 07.11.2025. In response to the
draft consultation, comments were received from various stakeholders viz. telecom service providers,
associations, and other stakeholders.
Examination of comments and Accounting Separation (Amendment) Regulations 2026:
11. The Authority has carefully examined all comments received and has balanced the need for effective regulatory
compliance with the principles of proportionality, fairness, and ease of doing business.
12. A stakeholder supporting the draft stated that the proposed changes would help improve financial discipline,
accountability, and transparency in the telecom sector. The stakeholder appreciated that penalties would be
linked to the severity and frequency of non-compliance, which, in its view, would discourage violations and
strengthen regulatory oversight and financial disincentive provisions are necessary to ensure proper reporting
and protect consumer interest.
13. Some stakeholders have argued that the ASR is no longer relevant, as it was originally introduced for cost-
based regulation like IUC, which is no longer applicable. According to them, TRAI receives sufficient
information through audited financial statements, making ASR filing repetitive and burdensome. In this regard,
it is mentioned that the Audited Annual Financial Statements i.e. Profit & Loss Account and Balance Sheet of a
company provide only aggregated information of the company as a whole whereas for regulatory purposes,
licensed service area (LSA)-wise, service-wise and Product-wise disaggregated information is required, which
can only be facilitated/provided by the Accounting Separation Reports. Therefore, the Authority is of the view
that detailed financial and non-financial information is required for regulatory decision making/analysis to
ensure a fair and transparent regulatory environment and promote fair competition.
14. Most of the stakeholders submitted that delays in submission of ASR are usually unintentional and arise due to
administrative, audit-related, or technical reasons. They suggested that the existing penalty framework is
sufficient and that higher penalties may impose unnecessary financial burden. In this context, the Authority
notes that timely submission of reports under regulation 5 of 'The Reporting System on Accounting Separation
Regulations, 2016' is essential for effective regulatory monitoring and analysis. Delayed submission would in
turn affect the Authority's ability to carry out its regulatory functions in a timely manner. Accordingly, the
Authority has adopted the said framework of financial disincentive, where lower financial disincentives apply
for short delays and higher financial disincentives apply when the delay continues beyond seven days.
15. Majority of the stakeholders have expressed concerns regarding the proposal to impose a financial disincentive
of up to 1% of turnover for false reporting. They submitted that such a turnover-linked penalty is arbitrary,
excessive and disproportionate, especially when even minor, technical or clerical mistakes may attract very
high financial consequences. No other sectoral regulator in India imposes turnover-linked penalties for routine
reporting lapses instead regulators employ fixed nominal penalties to encourage compliance. Penalising such
errors through a percentage of total turnover, without linking the amount to the seriousness or frequency of the
violation, would be punitive and inconsistent with the principles of proportionality, fairness and natural justice.
16. Taking cognizance of the comments received from the stakeholders, the Authority is of the view that in case of
false reporting, nature of non-compliance needs to be assessed primarily on a case-to-case basis. This analysis
can be based taking into account factors such as intent, materiality, impact on regulation or competition, and the
past compliance record of the service provider. Unintentional errors, such as typographical mistakes, formatting
errors, computational discrepancies or inconsistencies arising from inadvertent slip or omission, may be treated
as minor oversights in documents that do not alter intended meaning but may require correction for accuracy.
On the other hand, deliberate omissions or misstatements of material information, which may undermine
regulatory processes and affect decision making, should be treated as major violations. Accordingly, in case of
false reporting, the Authority has prescribed different slabs of financial disincentives upto Rs. 5 crore based on
major and minor violations, which are further categorised based on the annual turnover of the company. The
Authority is of the opinion that this will not only take care of unintentional or deliberate omissions but also the
violations done by larger operators that may have a wider regulatory and costing impact as compared to smaller
entities.
17. Stakeholders also suggested to align the regulatory framework with the spirit of the Jan Vishwas Bill, 2025
focusing on simplification, proportionality, and regulatory certainty. As regards alignment with the Jan
Vishwas initiative and the Ease of Doing Business agenda, the Authority is of the view that a predictable,
transparent, and proportionate enforcement framework enhances regulatory certainty and ultimately supports
ease of doing business. The financial disincentive framework is not intended to be revenue-generating but is
designed solely to promote timely compliance and ensure a regulatory oversight among service providers.
18. The Authority is of the view that introducing graded financial disincentives would ensure that the financial
disincentive imposed is proportionate to the gravity of the contravention, the intent of the service provider, and
the impact of the violation. Graded financial disincentive would link the disincentive to the nature and
seriousness of non-compliance, rather than applying a uniform financial disincentive. Such an approach is
essential to maintain the integrity of the regulatory framework and encouraging stakeholders to adhere to
prescribed standards. Prescribing a ceiling on the total financial disincentive helps prevent excessively high
financial disincentives or punitive outcomes, particularly in cases of minor or unintentional violations. A
capped framework ensures that financial disincentives act as an effective deterrent without causing undue
financial stress to service providers, especially smaller entities, thereby safeguarding service continuity and
consumer interest. Further, the proposal to levy interest on delayed or non-payment of financial disincentives is
intended to discourage intentional delays and ensure timely compliance with regulatory orders. This measure
not only promotes timely and responsible financial conduct but also reinforces the importance of adhering to
regulatory obligations. Similar approached are already being followed in other regulations issued by the
Authority and is also consistent with the framework prescribed under the Telecommunications Act, 2023.
19. Further a provision has been incorporated that the Authority may waive or impose a lower amount of financial
disincentive where it finds merit in the reasons furnished by the service provider will act as a safety valve in
regulatory enforcement, as it will avoid one-size-fits-all penalties. It further takes care of the suggestions made
by the stakeholders that materiality, impact of non-compliance, and the compliance track record of service
providers can be considered while imposing the financial disincentive. This provision will allow waiving the
financial disincentive entirely or reducing its amount if the service provider submits valid reasons that the
Authority deems cogent. This balances strict compliance with fairness, preventing undue hardship on the
service providers while maintaining regulatory goals.
20. In view of the above, the present amendment regulation aims to amend the relevant regulatory provisions to
enhance the effectiveness of financial disincentives in ensuring regulatory compliance. For this purpose, the
Authority proposes to introduce three key measures: imposing financial disincentives in a graded manner based
on the seriousness of the violation, prescribing a maximum ceiling on the total amount of financial disincentive,
and levying interest in cases of delay or default in payment. These measures are aimed at improving
enforcement while maintaining fairness and proportionality.
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