THE SUPREME Court Friday dismissed applications by telecom companies seeking correction of what they claimed were “arithmetic errors” in the calculation of Adjusted Gross Revenue (AGR) payable to the Department of Telecommunications (DoT).
“All applications are dismissed,” a bench of Justices L Nageswara Rao and S Abdul Nazeer and M R Shah said.
While Bharti Airtel had estimated its AGR dues at Rs 18,000 crore and Vi (Vodafone Idea) at Rs 25,000 crore, the DoT told the Supreme Court the two companies owed it Rs 43,000 crore and Rs 58,000 crore, respectively.
The question of Adjusted Gross Revenue (AGR) dues payable by telecom companies to the government had been a point of dispute since 2003. In 2011, the SC first ruled that TRAI and TDSAT did not have the jurisdiction to exclude certain items of revenue included in AGR. On Friday, it dismissed all pleas by companies over arithmetic errors in the calculation of AGR.
The SC order will particularly intensify the financial troubles for debt-laden Vi, market analysts said. It has to pay nearly Rs 6,000 crore in AGR dues every year between 2021 and 2031. The company also owed Rs 96,270 crore in deferred spectrum obligations, and another Rs 23,000 crore to banks and financial institutions as of March 31 this year.
Appearing for Vodafone Idea, Senior Advocate Mukul Rohatgi said it was not cast in stone and the top court could rectify the “arithmetic error”. Senior Advocate A M Singhvi, representing Bharti Airtel pointed to cases of duplication and of payments made but not accounted for while calculating the dues. Tata Teleservices counsel Senior Advocate Arvind Datar contended that the SC ruling only barred reassessment but not rectification of errors.
Upholding the DoT stand on what constitutes AGR, the Supreme Court had, on October 24, 2019, paved the way for recovery of AGR dues amounting to about Rs 1.6 lakh crores from telcos. Meanwhile, the Centre urged the court to allow telecom companies which pleaded financial difficulties to pay the dues over a 20 year period. By an order on September 1, 2020, the court allowed the companies to pay the same over a 10-year period, starting April 1, 2021.
It, however, warned of contempt of court proceedings against companies that failed to pay the stipulated AGR dues. The ruling said the interest on the AGR amount due for the year will also continue to accrue until the payment is made.
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