Adding the much-needed relief for Indian telecom operators especially Vodafone Idea and Bharti Airtel, the Supreme Court give the telcos 10 years to fully pay back dues running into thousands of crores owed to the government. This massive due amount is from the top court’s October 2019 verdict that upheld the DoT’s calculations on adjusted gross revenue or AGR.

With this decision by the apex court’s three-judge panel headed by Justice Arun Mishra, the telcos now get 10 years or until 2013 to pay the AGR dues. However, they will need to find money soon to pay 10 per cent of this pending dues by March 31, 2021. Then rest of the amount in instalments by February 7 every year.

Indian Telecom - DoT and TRAI

The AGR dues of India telcos combined stand at roughly $13 billion or Rs 94,878 crores. This is based on DoT’s calculation of AGR dues payable by a telecom operator. Basically, it’s calculated based on a company’s gross revenue (from all resources) and is used to find the levy that will be imposed on the telcos income.

Those who may have lost the track of the case, back in October 2019 the Supreme Court accepted government definition of adjusted gross revenue or AGR which also include non-core revenue from the sales of assets, interest on deposits, licence fee and spectrum usage charges, rental income and more like it. The apex court ruled in favour of government ending a 14-year-old legal battle between telco and the government on the definition of AGR.

According to today judgement, any default and non-payment of instalments will invite interest, penalty and contempt of court. The telcos will also need to keep their bank guarantee alive until the time the payment is made.

Vodafone Idea has the highest AGR dues in its basket Rs 58,200 crore, of which the telco so far paid around Rs 7,900 crore. Bharti Airtel has an AGR due of Rs 43,780 crore and it has paid Rs 18,004 crore. Tata Teleservices has so far paid around Rs 4,197 crore in AGR dues and there is a balance of Rs 12,601 crore to be paid.

Now the important question still remains, who will pay the AGR dues of bankrupt or insolvent telcos such as Aircel, Videocon and Reliance Communications. The apex court has left this to the wisdom of the National Company Law Tribunal (NCLT).

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