DoT asks telcos for documents supporting AGR math

The department of telecommunications has asked all operators to speed up their self-assessment of adjusted gross revenue related dues and submit documents supporting their calculation even after Bharti Airtel, Tata Teleservices and Vodafone Idea made partial payment last week.

“The DoT has asked all private operators and public sector telecom companies to submit AGR self assessment documents as soon as possible,” a person aware of the matter said requesting anonymity.

“The documents should justify their (telcos’) calculation of AGR,” the person said.

Telecom operators are scrambling to pay dues after the Supreme Court on 14 February pulled up telcos and government officials for failing to comply with its October 2019 verdict.

The court had last year upheld the government’s definition of AGR, on which it calculates levies on telecom operators. The order dealt a massive blow to the telecom industry, which argued that AGR should only include revenue from core telecom operations. Telecom operators now have to pay dues for the past 14 years, along with interest and fines.

Vodafone Idea is the worst hit by the verdict and is on the brink of collapse. Its last-ditch efforts to earn a reprieve from the apex court last week failed after which it paid ₹3,500 crore as part payment of AGR dues.

The government is exploring the possibility of roping in third-party audit firms to reconcile dues payable by telecom operators after differences emerged in individual calculations made by the government and telcos, Mint had reported last week.

For instance, according to government calculations, Vodafone Idea needs to pay ₹50,000 crore as AGR dues, but the company believes its dues are half that amount.

“On self-assessment basis, we have found that the dues are ₹7,000 crore on principal and there is penalty and interest and interest on penalty, which will take this up to ₹23,000- ₹25,000 crore,” Vodafone Idea’s counsel, senior advocate Mukul Rohatgi, told news channel NDTV on 18 February.

Bharti Airtel last week paid ₹10,000 crore out of its estimated liability of more than ₹35,000 crore. It plans to pay the remainder before 17 March after doing a self-assessment of the dues. Tata Teleservices paid ₹2,197 crore last week but the government pegs its dues at ₹14,000 crore.

Jio is the only telco which paid its ₹190 crore dues on 23 January.

The fresh demand from DoT also comes days after a series of meetings between Vodafone Idea chairman Kumar Mangalam Birla and top government officials. Birla met telecom secretary Anshu Prakash on Tuesday, and followed it up with a meeting with finance minister Nirmala Sitharaman on Wednesday.

After last week’s meetings with Birla, the Finance Ministry and DoT have started discussions on possible relief measures to prevent the sector from becoming a duopoly.

“Several proposals are being discussed to provide the sector with immediate relief from the AGR dues. One of them involves setting up a fund which will lend money to telcos at a concessional rate to repay their dues,” a second person aware of the matter said requesting anonymity. The government or an entity owned by it could provide the seed capital to get the fund going, this source said.

A proposal to give a sovereign guarantee for funds to be raised by the telecom companies has also been considered, the second source said. But given the political compulsions that a sovereign guarantee entails and the brouhaha it could fuel because of it being given to private companies, it may not get the nod at the highest echelons of the government.

“A sovereign guarantee for money to be raised by telecom companies would have been amongst the simplest and the quickest exercises,” the source said.

“The government is also looking at the option of a revised payment plan which will enable companies to defer payment of penalties and interests in future. In this case, the immediate liability of telcos would be limited to the principal amount. A combination of these measures is being considered and an appropriate call on this will be taken soon,” the source added.

An email query sent to DoT was answered till press time.