SC To Hear Telecom Companies Plea On AGR-Related Dues Today

The Supreme Court will today hear fresh pleas of telecom firms, including Bharti Airtel, Vodafone Idea and Tata Teleservices, seeking a new schedule of payment of statutory dues to the tune of Rs 1.47 lakh crore to the Department of Telecommunications. A bench of justices Arun Mishra, S Abdul Nazeer and M R Shah will hear a batch of petitions filed by telecom companies in open court.

The pleas filed by Vodafone Idea, Bharti Airtel, and Tata Teleservices has sought more time for payment of adjusted gross revenue (AGR) related dues.

The telecom companies want to negotiate a fresh payment schedule with the Department of Telecommunications (DoT), which has issued demand notices to them.

Earlier on January 16, a bench headed by Justice Arun Mishra had dismissed review petitions of telecom firms seeking review of its earlier order asking them to pay Rs 1.47 lakh crore in statutory dues by January 23, saying it did not find any “justifiable reason” to entertain them.

The apex court had on October 24 last year ruled that the statutory dues need to be calculated by including non-telecom revenues in AGR of telcos.

It had upheld the AGR definition formulated by the DoT and termed as “frivolous” the nature of objections raised by the telecom service providers.

In an affidavit filed in the top court, DoT said that according to calculations, Airtel owes Rs 21,682.13 crore as licence fee to the government and dues from Vodafone totalled Rs 19,823.71 crore, while Reliance Communications owed a total of Rs 16,456.47 crore. BSNL owed Rs 2,098.72 crore and MTNL Rs 2,537.48 crore.

“The definition of gross revenue is crystal clear in the agreement. How the adjusted gross revenue to be arrived at is also evident. It cannot be submitted that the revenue has not been defined in the contract. Once the gross revenue is defined, one cannot depart from it and the very meaning is to be given to the revenue for the agreement,” the apex court had said in its October verdict.

According to the New Telecom Policy 1999, telecom licensees are required to share a percentage of their AGR with the government as annual licence fee (LF).

The 1999 policy came after operators made representation to Centre for relief against steep licence fee which they had consistently defaulted since 1994 and an option to licensees to migrate from fixed licence fee to revenue sharing fee was made applicable in the year 1999.

In addition, mobile telephone operators were also required to pay spectrum usage charges (SUC) for use of radio frequency spectrum allotted to them.

Telecos had moved the top court against the Telecom Disputes Settlement and Appellate Tribunal’s (TDSAT) order which ruled that certain non-telecom revenues like rent, profit on sale of fixed assets, dividend and treasury income would not be counted as AGR on which licence fee would have to be paid to government.

The TDSAT had exempted a large number of streams from the definition of AGR, like capital receipts, bad debt, distribution margins to dealers, forex fluctuations, sale of scrap and waiver of late fee.

It had also said revenue from non-core sources such as rent, profit on sale of fixed assets, dividend, interest and miscellaneous income must be included while computing a carrier’s AGR, dealing a setback to telecos who would have to shell out more towards licence and spectrum usage fees.―Money Control