Follow Us:
Wednesday, February 26, 2020

SC upholds DoT definition of AGR; telcos to pay govt over 92,000 crore

A bench of Justices Arun Mishra, MR Shah and S Abdul Nazeer said it will fix the timeline within which the companies will have to pay the amount and that it will also ensure that the matter is not caught in further litigation.

By: Express News Service | New Delhi | Published: October 25, 2019 12:57:46 am
Department of Telecommunications, supreme court dues telecom service providers, Telecom companies, Bharti Airtel, Vodafone Idea, Supreme Court,indian express, latest news The SC also termed as “highly unfair”, the “conduct” of the TSPs even after they “benefited” from the scheme of a fixed licence fee under the National Telecom Policy of 1994 to revenue sharing under the revised telecom policy of 1999.

Paving the way for the Centre to recover dues of over a whopping Rs 92,000 crore from telecom service providers (TSPs) in the form of adjusted gross revenue (AGR), the Supreme Court Thursday allowed an appeal filed by the Department of Telecommunications (DoT) and upheld its definition on what constitutes AGR as provided in clause 19.1 of the telecom licence agreement between the service providers and the government.

A bench of Justices Arun Mishra, MR Shah and S Abdul Nazeer said it will fix the timeline within which the companies will have to pay the amount and that it will also ensure that the matter is not caught in further litigation.

“In our considered opinion, ‘gross revenue’ is the revenue has been held in 2011 judgment finding is binding on parties for determination of license fees under the licence agreement”, the bench said, adding “what is the meaning of the definition of gross revenue has been finally settled inter parties” in a 2011 judgment of the SC. The top court was critical of the TSPs in raising the challenge to AGR despite the same having been settled in 2011.

Department of Telecommunications, supreme court dues telecom service providers, indian express, latest news

“When we ponder on the definition of ‘gross revenue’ in clause19.1 of the licence agreement, it is apparent that the gross revenue has to be taken into consideration without any set-off for related items of expense. Thus, the gross amount, as per the definition, is the gross revenue, without set-off, is to be taken into consideration including the discounts given. Parties understood right from the beginning that the gross revenue does not exclude discounts, commissions, rebate etc. and specific challenge made to the same had not been accepted in 2011. Now once again by the circuitous method, impermissible attempt has been made to rewrite the definition of gross revenue”, the bench said.

The SC also termed as “highly unfair”, the “conduct” of the TSPs even after they “benefited” from the scheme of a fixed licence fee under the National Telecom Policy of 1994 to revenue sharing under the revised telecom policy of 1999.

Explained | What is AGR? How will it impact Airtel, Vodafone Idea?

The order read, “Further, the conduct of the licensees has also to be considered in the backdrop of the fact that the regime of revenue sharing was extremely beneficial than the previous regime of the fixed licence fee, and they have tremendously benefited by it as is apparent from the statistics of the revenue earned by the licensees under the revenue sharing regime. When Government has parted with the privilege as to revenue on sharing basis under the license, and an agreement entered into, it ought to have been precisely followed. The conduct of the licensees was highly unfair, and anyhow and somehow, they had attempted to delay the payment.”

The question of AGR had been a point of dispute from 2003 with the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) ruling that some of the heads of revenue would not fall under it.

However, the SC said that it had in the 2011 judgement ruled that TDSAT does not have the jurisdiction to exclude certain items of revenue, which were included in the definition of AGR from its purview. “TRAI and Tribunal had no jurisdiction to decide on the validity of the definition AGR in the licence agreement”, it said.

On Thursday, the TSPs requested the court not to fix a deadline for payment of dues saying they will have to calculate the dues in terms of the judgment.

Appearing for DoT, Solicitor General Tushar Mehta, however, urged the court to fix a deadline saying if not “they will now challenge the calculation”.
In July, the Centre had told the apex court that TSP’s like Bharti Airtel, Vodafone, MTNL and BSNL had pending licence fee of over Rs 92,600 crore. In an affidavit filed in the SC, DoT said that as per calculations, Airtel owed Rs 21,682.13 crore as licence fee to the government while Vodafone owed Rs 19,823.71 crore and Reliance Communications had to pay Rs 16,456.47 crore. BSNL owed Rs 2,098.72 crore, while MTNL owed Rs 2,537.48 crore, it added.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.

Advertisement
Advertisement
Advertisement
Advertisement