AGR issue: SC knocks down DoT\'s Rs 4 lakh crore demand against PSUs

AGR issue: SC knocks down DoT's Rs 4 lakh crore demand against PSUs

Admitting differences in licenses of PSUs and telcos, Supreme Court added that its ruling on the matter has been misinterpreted and could not have been made the basis of launching a demand against PSUs

Supreme Court has adjourned the AGR (adjusted gross revenue) matter for hearing on June 18 and directed telecom companies to file affidavits on how they will pay the rest of their dues

The Supreme Court (SC) on Thursday said the Department of Telecommunications' (DoT) demand for Rs 4 lakh crore worth of AGR (adjusted gross revenue) dues from the PSUs (public sector undertakings) was "totally impermissible". The apex court added that the DoT should consider withdrawing it.

Questioning the Department of Telecommunications (DoT) on how the demand against PSUs (Public Sector Companies) to pay AGR dues has been raised, the top court said that its judgement never dealt with them (PSUs). Admitting differences in licences of PSUs and telcos, the SC added its ruling on the matter has been misinterpreted and could not have been made the basis of launching a demand against PSUs.

Amongst PSUs, Oil India's dues stand at Rs 48,489 crore, Power Grid at Rs 22,062.65 crore and GAIL at Rs 1.72 lakh crore.

Also read: Fresh AGR blow coming! Telcos' dues to go beyond Rs 1.47 lakh crore

The top court adjourned the AGR (adjusted gross revenue) matter for hearing on June 18 and directed telecom companies to file affidavits on how they will pay the rest of their dues.

The Justice Arun Mishra-led bench heard the argument of several telecom firms - Bharti Airtel, Tata Teleservices, Vodafone Idea - regarding the payment of mammoth AGR dues worth Rs 1.43 lakh crore. The last hearing was held on March 18, when the top court censured the Department of Telecommunications (DoT) for letting telcos to estimate the payable dues themselves and for not complying with its order on dues and penalty payments.

"Exercise of self-assessment of AGR dues by telecom companies cannot be permitted even in wildest dreams. Withdraw forthwith any such orders that have been passed," it said, adding that "this is sheer fraud."

The DoT had moved the apex court to propose the phased payment of license fee and spectrum usage charges dues worth Rs 1.43 lakh crore by telecom firms spread over 20 years. The department was of the view that the immediate payment would cause likely bankruptcies and could possibly impact crores of customers.

Also Read: AGR issue: Vodafone Idea tells SC it can only pay Rs 2,500 crore; gets no relief

The SC noted that it was open to considering the matter of phased payments spread over 20 years, as proposed by DoT. However, no further hearings could take place due to the coronavirus-induced lockdown.

In October last year, the Supreme Court upheld DoT's position on calculating dues after including non-telecom revenues in AGR and had ordered payment of the full amount for the past 15 years within three months.

In its ruling, the apex court said statutory dues needed to be calculated by including non-telecom revenues in AGR of telecom companies. It upheld the AGR definition formulated by the DoT and termed "frivolous" the nature of objections raised by telecom service providers.

When the companies dithered and filed pleas, the court threatened to initiate contempt proceedings for non-compliance. Earlier this week, the government filed a plea seeking a 20-year payment scheme with a view to helping the telecom sector that is already saddled with huge debt and losses arising from cut-throat competition.

While Bharti Airtel has raised funds to meet the payment demand by way of rights issue of shares and bond sales, Vodafone Idea Chairman Kumar Mangalam Birla in the past indicated that the company would fold up if it was forced to make the payments, as per DoT calculations. Expressing anguish at newspaper articles interpreting its order, the top court said all MDs of telecom companies would be personally responsible and held in contempt of court for any such future write-ups hiding the truth.

Also Read: Telecom crisis not limited to AGR, problem much deeper: Subhash Chandra Garg

Vodafone Idea has paid Rs 6,854 crore of its dues so far, as against DoT's demand of Rs 58,254 crore. But the company's self-evaluation pegged its dues at Rs 21,533 crore.

Simultaneously, Bharti Airtel has paid Rs 18,004 crore so far, whole the DoT's demand of the telco stands at Rs 43,980. The company has self-assessed its dues at Rs 13,004 crore.

As per the DoT's submission to the SC, the total due amount is Rs 119,292 crore, of which the telecom players have so far paid Rs 25,896 crore. Thus, the balance amount due is Rs 83,520 crore.

Reliance Jio is the only Telco that doesn't have any heavy dues. The new entrant in the telecom market is required to pay Rs 70.5 crore, as per the DoT.

Also Read:Vodafone share price slips 14% ahead of SC hearing on AGR dues