Vodafone-Idea, Airtel AGR case: Taking strong note of non-compliance of its earlier order, the Supreme Court on Friday issued notices of contempt to telecom giants Vodafone Idea and Bharti Airtel over non-payment of adjusted gross revenue (AGR) and summoned the managing directors of the firms for the next hearing on March 17. The court also directed the firms to pay an amount of Rs 1.47 lakh crore to the Department of Telecom (DoT) by the next hearing.
“We have dismissed the review plea in adjusted gross revenue case but still not a single penny has been deposited. Our conscience has been shaken by the way things are happening in the country,” a bench headed by Justice Arun Mishra said.
“Pay up by the next date of hearing. This is the last opportunity all companies have. We must do this. Corruption of all kinds must stop,” he added.
The bench, also comprising of Justice S Abdul Nazeer and Justice M R Shah, sought an explanation from the telecom companies on why contempt action should not be initiated against them for non-compliance of its order.
Justice Mishra also rapped an officer of the DoT for writing a letter to the Attorney General and other constitutional authorities saying they should not insist on payment of money by telcos and others and to ensure that no coercive action is taken against them.
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“We don’t know who is creating this nonsense. Is there no law left in country… It is better not to live in this country and rather leave the country,” the bench observed.
The court also said that the DoT officer’s request to the AG must be withdrawn by evening, failing which he would be sent to jail.
Last month, the Licensing Finance Policy Wing of the Department of Telecommunications (DoT) had directed all departments not to take any action against telecom operators if they failed to clear the AGR dues. This had, then, come as a huge relief to the operators who would have otherwise faced possible contempt action.
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.
What is AGR?
The definition of AGR has been a contentious point among India’s telecom players and the source of a running battle between the government and industry for years. The slugfest between DoT and the telecom companies has been on since 2005, when the the Cellular Operators Association of India — the lobby group for players such as Airtel and Vodafone Idea — challenged the DoT’s definition for AGR calculation. Subsequently, in 2015, the TDSAT ruled that the AGR included all receipts, except capital receipts and revenue from non-core sources such as rent, profit on the sale of fixed assets, dividend, interest and miscellaneous income, etc.
The government, meanwhile, continued to raise the issue of under-reporting of revenues to duck charges. The Comptroller and Auditor General of India (CAG), in a recent report, blamed the telecom companies for “understating revenues” to the tune of Rs 61,064.5 crore. The latest petition by the DoT was being heard in the Supreme Court, wherein the DoT sought interest, penalty and interest on penalty on the outstanding amount. These amounted to Rs 92,641 crore (disputed actual demand is Rs 23,189 crore, levy of Interest of Rs 41,650 crore, penalty of Rs 10,923 crore and interest on penalty of Rs 16,878 crore).
Supreme Court stance so far
On October 24 last year, the court agreed with DoT’s definition of AGR, and said the companies must pay all dues along with interest and penalty. Bharti Airtel and Vodafone Idea tried to persuade DoT to relax the deadline and, after failing, moved the court seeking a review of its judgment. The court dismissed the review petition, and also did not extend the deadline for paying AGR dues. It did, however, agree to hear the companies’ modification plea.
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