AGR dues: Supreme Court lashes out at DoT, telcos; says must pay all dues

The Supreme Court on Wednesday once again came down heavily on the Department of Telecommunications (DoT), which had filed a petition seeking relief for telcos in paying the dues linked to adjusted gross revenue (AGR). The court shot down the DoT proposal that telecom companies might be permitted a 20-year staggered payment and exemption from penalties and interest in relation to the AGR dues. 

A Bench of Justices Arun Mishra, S A Nazeer, and M R Shah refused to take up the Centre’s plea for allowing telecom firms to pay the AGR dues in 20 years, saying the application would be taken up after two weeks. The court was also critical of the companies for trying to evade the payment, while pulling up the media for not reporting facts as they were. The court has asked telcos to pay the full dues as assessed by the DoT and has agreed to look at the manner of payment. The court has summoned the DoT officials responsible for allowing telcos self-assessment of dues. It said neither the DoT nor the telcos would be spared. 

It ordered the telecom department to immediately withdraw the move of allowing self-assessment of dues, while stating that the companies cannot “hoodwink” the court. If required, the managing directors of the telecom companies will be summoned and may even be sent to jail, it observed.

According to DoT estimates, the telecom industry was liable to pay Rs 1.47 trillion in AGR-linked dues following the SC order on October 24, 2019. Telecom firms however assessed their AGR dues at a fraction of what the government had calculated and paid to the government accordingly. SC has now questioned the very basis of self-assessment of the AGR dues by telcos. “Who permitted self-assessment without the permission of the court,” Mishra asked.

Mishra said no further objections would be allowed against payable dues and that the DoT’s demand had been confirmed by the court.

DoT, on its part, has time and again said that the telecom companies — Bharti Airtel, Vodafone Idea and Tata Teleservices — owe Rs 1.02 trillion. The Rs 1.47-trillion AGR bill is for a total of 16 telecom companies, many of which have gone out of business.  

SC also said that its order had clearly spelt out the dues. The apex court added that the request of corroborating the self-assessed dues in eight to ten  months cannot be allowed.  The dues should be paid in accordance with its verdict given on October 24, 2019, according to the court.

Lashing out at the managing directors of telecom companies, the court said they would be personally responsible and would be held for contempt of court for any misleading media reports on the AGR subject.

Mishra said that newspapers were trying to influence the courts and the companies were trying to influence the SC through the media. The top court even threatened to recuse itself from the AGR case if the Centre took the matter lightly, saying it was “tantamount” to seeking a review of the SC judgment.

On Monday, the DoT had submitted a plea to the Supreme Court seeking significant concessions for telcos, changing the contours of the dispute over what constitutes AGR and the associated liabilities of the operators.

DoT had sought a 20-year staggered payment of the operators’ dues linked to AGR along with a waiver of interest and penalty.

In the October 2019 verdict, the SC had upheld the government's position on including revenue from non-core businesses in calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.

Of the estimated dues that include interest and penalty for late payments, Airtel and Vodafone Idea accounted for about 60 per cent of the total.

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