The Supreme Court on Friday pulled up Bharti Airtel and Vodafone Idea for not paying their adjusted gross revenue (AGR) dues to department of telecommunications (DoT). The apex court also ordered the managing director and top officials of the companies and the DoT to be present in court on the same day when the case would be heard again.
The court made scathing observations on the conduct of the telecom companies as well as the DoT for ignoring its 24 October verdict that had directed the firm to pay DoT by 23 January over ₹1 trillion in dues for under reporting their revenues.
“We draw contempt against companies. Let the desk officer also explain why appropriate action should not be taken and he should be present on the next date of hearing. Please ask the desk officer to withdraw that dot order or he will go behind the bars by evening. We have to take action against him. Officer should understand where they should stop. It is clear contempt," the court said.
The government had refused to take coercive action against mobile service providers that failed to meet the court-directed deadline to pay dues after Vodafone Idea and Bharti Airtel sought more time.
The apex court had ended a 14-year legal battle between telecom companies and the DoT over what constituted AGR. The companies had contested DoT’s claim that items like dividend, rent and interest were part of AGR, and hence, the companies needed to include them while calculating their taxes. India levies licence fees of 8% of AGR on every telecom licence holder.
Vodafone Idea owes over Rs50,000 crore to DoT, while Bharti Airtel has to pay Rs35,586 crore. Tata Teleservices, which sold its mobile services business to Airtel, has dues of Rs14,000 crore. Jio is the only company that paid its dues. It was a small amount Rs60 crore as the company started operations only in 2016.
Bharti has raised the funds needed to pay the dues, while Vodafone has expressed its inability to pay because of lack of funds.
While the Supreme Court verdict had hit telcos, it had also made non-telecom firms holding licences for internal communications and signalling liable to pay licence fees on their entire revenue, even if they did not offer telecom services. DoT has sought ₹1.72 trillion from GAIL (India) Ltd, ₹48,000 crore from Oil India Ltd, ₹22,168 crore from Power Grid Corporation of India Ltd, ₹15,019 crore from Gujarat Narmada Valley Fertilisers and Chemicals Ltd and ₹5,841 crore plus interest from Delhi Metro Rail Corp Ltd (DMRC), among others.