In a setback to mobile operators, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on Thursday ruled that certain non-telecom revenues like rent, profit on sale of fixed assets, dividend and treasury income would be counted as adjusted gross revenue on which licence fee would have to be paid to the government.
The ruling has not gone entirely against the operators as it has exempted a large number of streams from the definition of AGR like capital receipts, bad debt, distribution margins to dealers and forex fluctuations, which would be beneficial to the firms; however, the gains made here are relatively smaller than in the streams that have been included. Further, the broad principle followed by the tribunal that income generated through a telecom company should be counted as telecom revenue and its timing is not favourable to the telcos.
Though the TDSAT disposed of the operators’ petitions against the government with its ruling, the issue is unlikely to end here as operators are likely to challenge it before the Supreme Court.
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