The petition filed by telecom companies to recalculate adjusted gross revenues (AGR) was rejected by the Supreme Court on Thursday, amidst an ongoing disagreement over payment of dues to the government.
Firms challenge October 2019 ruling to pay Rs 92,000 crore
Vodafone India, Bharti Airtel, and other telecom companies have submitted a curative petition contesting the court’s October 2019 ruling that required them to pay the government Rs 92,000 crore in three months.
The telecom companies claimed in their plea that the Department of Telecommunications (DoT) had made a notable mistake in computing the owed amounts, which encompass license fees and spectrum charges.
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Companies stated the top court had placed “random fines” on them
The companies also stated that the highest court had placed “random fines” on them.
AGR is responsible for determining how telecommunication companies distribute revenue with the government, which generates income from licenses and the utilization of spectrum.
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The government’s portion of revenue is determined by the DoT using a percentage of AGR, with spectrum usage fees ranging from three to five percent and licencing fees at eight percent.
There has been ongoing debate over the calculation of AGR for nearly two decades. Telecommunication companies believe it should only include main income, while the government includes all revenue, including non-telecommunications earnings.
In 2019, the highest court supported the government’s decision, instructing telecom firms to settle Rs 92,000 crore in 180 days. This greatly impacted the sector, as Vodafone India and Bharti Airtel quickly reported historic losses.
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Airtel and Vodafone had earlier delayed payment of AGR dues by 4 years
In July 2022, Airtel pushed back the payment of approximately Rs 3,000 crore in AGR dues from FY 2018/19, which were not part of the 2019 court ruling, by four years. Vodafone also delayed the payment of Rs 8,837 crore in extra AGR dues by four years.
The delays occurred after the DoT requested AGR payments for two financial years after 2016/17, which were not included in the Supreme Court’s decision. As of the financial year 2018/19, telecom operators have outstanding AGR dues of more than Rs 1.65 lakh crore.
