DoT’s Test Checks On Telcos AGR Dues Assessment May Start Soon

The “test checks” as promised by the government on AGR-hit telecom companies’ dues assessment could start this week for large telcos, according to a senior DoT official.

The government also wants Vodafone Idea to expedite its self-assessment, and Telecom Secretary Anshu Prakash is believed to have communicated DoT’s views in this regard to VIL, CEO and MD Ravinder Takkar during a recent meeting on Friday evening.

A DoT official said that “test checks” of AGR calculation for a sample year would commence shortly and it could be as early as this week at least for large telecom companies.

On Saturday, telecom operator Bharti Airtel said it has made payment of Rs 8,004 crore towards adjusted gross revenue (AGR) dues to the government, an amount over and above Rs 10,000 crore it has already paid.

The amount of Rs 8,004 crore includes Rs 3,004 crore towards full and final settlement on AGR dues based on self assessment, and a deposit of buffer Rs 5,000 crore to cover DoT’s reconciliation differences.

“Based on the aforesaid payment we have now complied with AGR judgement and the directions in the order of the Supreme Court dated October 24, 2019,” Airtel said in a regulatory filing.

According to the Department of Telecom (DoT) estimates, however, Airtel owes nearly Rs 35,000 crore.

DoT is also asking three telecom companies Bharti Airtel, Vodafone Idea and Tata Teleservices to provide substantiating documents to support their claims on AGR arithmetic.

Once substantiating documents are filed by the companies, the telecom department will initiate random ‘test checks’ on the AGR calculation in a time-bound manner.

The ‘test check’ will be done for any one year (of telcos’ dues) to examine the deviation between telecom companies’ assessment and the government’s own calculation of AGR liabilities.

In all, 15 entities owe the government Rs 1.47 lakh crore in unpaid statutory dues — Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges.

Of the estimated dues that include interest and penalty for late payments, Airtel and Vodafone Idea account for about 60 per cent.

These dues arose after the Supreme Court, in October last year, upheld the government’s position on including revenue from non-core businesses in calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.

The Supreme last month rejected a plea by mobile carriers such as Bharti Airtel and Vodafone Idea for extension in the payment schedule and asked companies to deposit their past dues for spectrum and licences.

Since then, telecom firms and the telecom ministry had been doing separate maths on the actual dues.

Vodafone Idea, which is confronted with Rs 53,000 crore in statutory dues as per DoT’s calculation, has so far paid only seven per cent of those dues in two tranches. Airtel has paid over Rs 18,000 crore out of its DoT estimated liability of over Rs 35,000 crore.

Tata Teleservices has paid Rs 2,197 crore, the entire outstanding it believes to have arisen after the October ruling of the apex court for calculating dues.

Both Bharti Airtel Chairman Sunil Mittal and Vodafone Idea Chairman Kumar Mangalam Birla continued to meet top government functionaries over the last few days to seek prompt measures that would offer a breather to the troubled sector.

Mittal has urged the government for reduction in levies and taxes, as he termed the AGR “an unprecedented crisis for industry”.

Even as the AGR-crisis has pushed telcos to the brink, the crucial meeting of Digital Communications Commission (DCC) on Friday discussed options on relief to the distressed telecom sector but could not arrive at a decision, as government officials said more details are required for reconciliation of data on statutory dues.

Telecom companies have been desparately waiting for a bailout package from the Government after an SC-order on statutory dues, and all eyes were on the DCC meet for the much-needed breather to fix the AGR imbroglio.―Business Standard