Telcos have 10 years to pay Adjusted Gross Revenue dues: Here’re 10 points to understand the issue | Economy News
New Delhi: The Supreme Court Tuesday granted 10 years to telecom firms such as Vodafone Idea, Bharti Airtel and Tata Teleservices for paying the Adjusted Gross Revenue (AGR)-related dues to the Department of Telecommunications (DoT).
However the payment of the dues over the extended time comes with certain conditions.
What is Adjusted Gross Revenue?
Telecom operators are required to pay licence fee and spectrum charges in the form of revenue share to the Centre. The revenue amount used to calculate this share is termed as Adjusted Gross Revenue.
What is the calculation point of the AGR?
As per the Department of Telecommunications (DoT), the AGR calculations should incorporate all revenues earned by a telecom company. This also includes revenues earned from non-telecom sources such as deposit interests and sale of assets. However, the telecom companies have challenged this and said that it should include only revenue earned through telecom services.
Here are 10 points to understand the issue
- The bench headed by Justice Arun Mishra delivered its verdict on the issues, including the time line for staggered payment of AGR-related dues amounting to about Rs 1.6 lakh crore.
- The apex court asked telcos to pay 10 per cent of the AGR-related dues by March 31, 2021.
- The bench held that the demand made by the DoT and the verdict delivered by the top court in the matter are final.
- The bench asked the Managing Directors (MDs) or Chief Executive Officer (CEOs) of the telcos concerned to furnish undertaking or personal guarantee within four weeks for payment of dues.
- Failure to pay the instalments of the dues would incur penalty, interest and contempt of court, the bench cautioned the telecom firms.
- While pronouncing the verdict, the bench said that till the last instalment is paid by the telcos, their bank guarantees furnished to the DoT would be kept alive.
- Vodafone Idea and Bharti Airtel had previously asked the court for 15 years to settle their fees.
- The SC ruling means that the telecom companies will have until 2031 to clear their dues, after they have now missed the original January deadline.
- The telecom operators will have to pay the DoT nearly 3-5% of their adjusted gross revenue (AGR) in usage charges for airwaves and 8% of AGR as licence fees.
- Telcos have long disputed the definition of AGR but last year the Supreme Court upheld the DoT`s view the AGR should include all revenue.
The Supreme Court decision may come as a big respite for heavily indebted Vodafone Idea and Bharti Airtel, whose business have lately been hit by fierce competition.
