Government Unlikely To Waive Off Rs 1.33 Trillion Tax Payout By Telcos

The government is likely to rule out any waiver or reduction in the Rs 1.33 trillion payout by telcos, as a result of the recent Supreme court order on the definition of adjusted gross revenue, according to a source in the know.

While telcos may have to fork out the full amount, the government will possibly make a representation to the court asking for an extension of the three-month deadline, imposed by the SC, to make the payment.

The committee of secretaries (CoS), which has been set up to look into issues related to the financially stressed telecom industry, met for the first time on Thursday. The Department of Telecommunications (DoT) made a presentation on the health of the industry at the meeting.

The high-level panel, headed by Cabinet Secretary Rajiv Gauba, is expected to take some time before a view is taken on the future course of action.

The industry, meanwhile, has been seeking relief on penalty and interest on the AGR dues while asking for a staggered payment format.

Incumbent operators, through the Cellular Operators Association of India (COAI), have sent a letter to communications minister Ravi Shankar Prasad, demanding a 10-year payment period with a two-year moratorium to clear the AGR dues. Soon after sending a letter a few days ago asking for a complete waiver of the amount, COAI, mainly representing Bharti Airtel and Vodafone Idea, has now urged the DoT to waive the “interest, penalty and interest on penalty”. The latest letter has stated that since the disputed payments go back to accumulation over the past 14 years, telcos want “the principal repayment of the past dues to be done over a period of ten years with a two-year moratorium”.

Reliance Jio, which has argued that incumbent telcos such as Bharti Airtel and Vodafone Idea don’t need a waiver, is expected to respond to the COAI letter soon.

A member of the recently constituted committee of secretaries said: “It’s a judgment by the apex court. We really don’t have much leeway or room to manoeuvre here. The official said a staggered payment schedule could be a likely outcome, but did not elaborate on a time line. The details on whether to give a relief package was yet to be decided, he said.

The SC order (without additional spectrum usage charges or SUC) would require the telcos to fork out over Rs 92,641 crore. With SUC, it would come to around Rs 1.33 trillion.

However, telcos would like to pay only Rs 23,188 crore — the unpaid dues of the licence fee in the last 12 years. Beyond this amount, there’s an interest of Rs 41,650 crore, penalty of Rs 10,923 crore and an interest on penalty of Rs 10,923 crore. COAI, in its letter, has asked for waiver on all except the unpaid dues.

COAI in its first letter to DoT had complained that the court decision, if waiver was not given, will lead to a monopoly in the sector and the government’s digitisation programme would suffer.

Jio attacked the association for exploiting the legitimate payout obligations to create an ‘’alarmist propaganda’’. According to Jio, operators have the capacity and enough monetisation possibilities to comfortably pay the government dues.―Business Standard