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The government may abandon its demand for spectrum charges of about 40,000 crore from telecom operators to support the struggling companies.

The latest plan would offer further reprieve to Vodafone Idea Ltd and Bharti Airtel Ltd, adding to the government’s 15 September decision to offer a four-year moratorium on dues and the option to convert dues to the government into equity.

The government on Monday filed an affidavit in the top court stating that the decision to withdraw the batch of appeals against the telcos on spectrum charges is being examined by competent authorities.

The affidavit sought three weeks to inform the top court about the government’s decision to withdraw the cases against telcos.

The government affidavit said the sector is experiencing financial stress, and companies are incurring losses despite steps taken by the government to offer relief.

The timeframe would allow the central government to take an informed decision on whether or not to proceed with its set of appeals.

Referring to the steps taken on 15 September, the affidavit filed through the Department of Telecommunications (DoT) said the decisions were taken to promote public interest, protect government revenue and encourage competition to avert a monopoly and other adverse impacts on the economy.

“In the context of these developments, facts, financial position and the implications of the potential result of the captioned appeal, the central government is desirous of reviewing and/or reconsidering its decision to proceed with the present proceedings of appeal. It is submitted that considering the nature of the issues involved, if decision will have to be taken after the scrutiny at various levels which may consume some reasonable time," according to the affidavit.

The matter came up before a bench of justices M.R. Shah and A.S. Bopanna on Tuesday when solicitor general Tushar Mehta apprised the court of the government’s decision to reconsider proceeding with the appeals.

The court adjourned the matter to 17 November, clarifying that it is not “expressing anything on such proposed action/decision, which might have a larger implication."

The affidavit was filed in the Department of Telecommunications’ appeal in the case of Reliance Communications, which is the lead case in the batch of appeals that includes Vodafone Idea and Tata Teleservices.

The challenge in these appeals by the Department of Telecommunications is to the telecom appeals tribunal’s 4 July 2019 order that quashed its demand for a one-time spectrum charge (OTSC) on spectrum allotted beyond start-up 4.4MHz.

The tribunal ruled that the government can charge a one-time spectrum charge prospectively from 1 January 2013 or the date the government notified this decision and only on administratively allocated airwaves beyond 6.2MHz.

The Department of Telecommunications levied the one-time spectrum charge retrospectively from 1 July 2008, when the department raised a total demand of around 25,000 crore on nine telcos in 2013.

The decision to levy a one-time spectrum charge was taken by the former United Progressive Alliance (UPA) government, following the top court’s judgement in February 2012 cancelling 122 telecom 2G licences awarded by the then telecom minister, A. Raja.

In the adjusted gross revenue, or AGR, case, the Department of Telecommunications requested the Supreme Court to give 20 years to the telcos for discharging their AGR dues, citing their financial stress and other problems.

But, by its September 2020 judgement, the court rejected the 20-year payment timeline proposed by the Centre and restrained DoT from permitting telcos from reworking or reassessing the amounts payable.

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