Home / Industry / Telecom /  State-run firms need not pay AGR dues: Supreme Court

NEW DELHI : The Supreme Court on Thursday provided relief to public sector undertaking who had been given a demand notice for spectrum dues even as it dashed hopes of a breather for telecom companies by asking them to file affidavits on the roadmap and guarantee for payment of adjusted gross revenue (AGR) related dues to the government.

Hearing the case on AGR-related dues of telecom companies, including Vodafone Idea, Tata Teleservice, and Bharti Airtel, the court directed mobile operators to furnish details with respect to the revenue earned by them and their plan of action as to how they intend to clear the AGR dues.

The court observed that to secure government dues, the telecom companies should also give undertakings in order for the court to consider staggered payout of the dues, which currently for Bharti Airtel and Vodafone alone total over 75,000 crore.

The apex court had on 24 October upheld the Department of Telecommunication (DoT) definition of AGR and ordered telecom firms to pay levies based on that definition, along with interest on the principal amount and penalty.

The DoT earlier this year filed a plea seeking a 20-year payment period for the dues.

Justice Arun Mishra heading the apex court bench said, “Are these telecom companies ready to issue a Bank guarantee? Are directors willing to issue a personal guarantee? Undertakings will have to be there, or else we can't allow such staggered payout without securing the government’s dues."

Solicitor general Tushar Mehta submitted that the government had extensively examined the impact on the economy if the telcos are made to submit the entire amount at one go. The results would create distrust on the telcom sector as the operators might have to shut down and ultimately the consumers will suffer due to hindered quality and services.

The apex court however disagreed.

"Who has seen 20 years? Nobody knows what will happen in next 20 years, not even companies. Your plea of 20 years can't be reasonable, especially when this matter is already pending for 20 years," the court said.

After payment of 25,902 crore by the operators, the current dues of telecom companies for the 13-year period ending March 2017 to the Department of Telecommunications stood 1.69 lakh crores. The dues also include those of telecom companies that shut operations.

Vodafone Idea submitted that they cannot give bank guarantee of Rs.50,000 crore but for assurance the license and spectrum can be cancelled if they do not pay.

"Licenses and spectrum were auctioned. We purchased them for thousands of crores. Intrinsic value of the spectrum will be the best security," said senior advocate Mukul Rohtagi representing Vodafone.

Senior advocate Abhishek Manu Singhvi representing Bharti Airtel submitted that they have already paid Rs.18,000 crore which is 70 percent of Rs. 25,600 crores received from all the companies by DoT.

The bench also held that the 2019 AGR judgment was wrongfully interpreted to raise demands from the PSUs. It also asked the DoT to consider its bills from public sector companies like Power Grid Corporation of India (PGCIL), GAIL India, GNFC and Oil India.

The bench comprising Justices MR Shah and S Abdul Nazeer observing the difference in the licenses of telcos and PSUs asked the government to explain the demands raised against state-owned companies based on the AGR judgement.

Justice Mishra slammed DoT for raising demand from various PSUs under the garb of its judgement on AGR and threatened to take action against the concerned officers. “Let the authority explain within 3 days how our judgment has been misused. A demand of (Rs) 4 lakh crore is being raised against PSUs," the bench said.

The case will be heard next on 18 June.

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