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NEW DELHI: The Supreme Court on Monday reserved its order on the timeline of staggered payment of adjusted gross revenue (AGR) related dues by telecom operators including Vodafone Idea, Bharti Airtel and Tata Teleservices. Both Vodafone Idea and Bharti Airtel have requested for a 15-year window to clear the dues, while Tata Teleservices has sought 7-10 years.

The court also directed the Department of Telecommunications (DoT) to submit insolvency proceedings details of bankrupt telcos Reliance Communications (RCom), Aircel and Videocon Telecom within seven days.

A bench headed by Justice Arun Mishra observed that RCom has huge unpaid AGR dues, and the top court will examine whether the insolvency proceedings are bonafide. The court will take up the matter on insolvency proceedings on 10 August.

“Several telcos with AGR dues of over 38,000 crores are currently in liquidation. Need to ensure that IBC (Insolvency and Bankruptcy Code) is not being misused by telcos to escape liabilities," said Mishra.

The apex court reiterated that there is "no room for self-assessment" and telcos have to treat the AGR dues calculated by the DoT as final. However, the government wants that the telcos be granted a timeline for payment of dues to avoid insolvency.

The court also expressed doubt over Vodafone Idea's capacity to clear the dues, asking on how to "rely" on the company for payment over a period given its financial position. The telco has now sought 15 years to pay the dues versus 20 years earlier, accepting dues worth 58,254 crore estimated by the DoT.

Mukul Rohatgi, representing Vodafone Idea, said all revenues have been spent on liabilities, tax and dues, with over 1 trillion of equity brought in by promoters being eroded. Vodafone Idea mentioned the goods and services tax (GST) refund of around 8,000 crore, which the telco said can be retained by the government.

"The entire net worth of the company (Vodafone Idea) has been wiped out in the last 15 years...Of the total revenue of 6.27 trillion earned in the past 10 years, 4.95 trillion has been spent on expenses ," Rohatgi told the SC.

Abhishek Manu Singhvi, counsel for Bharti Airtel, said the DoT has wrongly calculated its dues amounting to 43,780 crore, which include spectrum usage charges (SUC). Singhvi said AGR dues do not involve SUC but only license fees.

Shares of Vodafone Idea ended up 1.8% at 9.04, while that of Bharti Airtel rose 1.5% to 575.75 on the BSE. The benchmark Sensex settled at 37,418.99 points, up over 1% from the previous close.

The apex court on 24 October upheld the DoT’s broader definition of AGR and ordered telcos to pay levies based on that definition, along with interest on the principal amount and penalty. The DoT calculates levies such as SUC and licence fees based on AGR.

The court directed 15 telcos, including the ones that have shut operations, to pay 1.47 trillion in AGR dues within three months.

On Friday, Vodafone Idea paid the DoT another 1,000 crore as part of its dues related to AGR, taking the beleaguered telecom operator’s total payments to 7,854 crore.

According to Bharti Airtel’s self-assessment, it owes 13,004 crore to the DoT. The telco has already paid this amount along with an additional 5,000 crore in ad-hoc payment subject to refund after the DoT reconciles its own estimates with that of the telco.

Reliance Jio Infocomm has already paid 195 crore to the DoT, clearing its dues accounted till 31 January, 2020, since the launch of the Mukesh Ambani-led telco in 2016.

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