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India’s telecom operators and the department of telecommunications (DoT) have different interpretations of the Supreme Court’s (SC) judgment on 10 per cent upfront payment of their total adjusted gross revenue (AGR) liabilities, which could prolong the legal battle that started in 2005. While telcos said they have already made an upfront payment of 10 per cent of the total dues and need not pay more till 31 March, the government is of the view that the 10 per cent should be paid irrespective of the part-payments made by them before the SC verdict.
The apex court, in its 47-page order on 1 September, said: “At the first instance, the telecom operators shall make the payment of 10 per cent of total dues as demanded by DoT by 31.3.2021.”
According to legal experts, the judgment is clear, which leaves no room for interpretation and orders the telcos to make a 10 per cent upfront payment of the total AGR dues, including a penalty, interest, and interest on the penalty. “The language of the judgment is very clear… The words used are not pending dues but total dues. Therefore, there appears to be no ambiguity as to the direction that amounts payable by telcos is 10 per cent of the total dues demanded by DoT, irrespective of what has already been paid,” said Sameer Jain, managing partner, PSL Advocates & Solicitors.
“The Supreme Court in its judgment dated 1 September 2020 categorically directed the telecom operators to make payment of 10 per cent of the total dues as demanded by DoT by 31 March 2021. This was towards the first tranche of payments to be made by the telecom operators,” said Rahul Goel, partner, AnantLaw.
A senior executive at a telco said it has paid way more than the mandated 10% upfront payment and has written to the government to clarify the same. However, DoT has never communicated its stance on upfront payment of AGR dues, which is creating confusion, the executive added.
He said the upfront payment, along with the recalculation of AGR dues, is likely to be taken up by SC in March. The top court on Wednesday said it will hear telcos’ pleas over calculation errors of AGR liability in two weeks.
In January, Bharti Airtel Ltd and Vodafone Idea Ltd (Vi) had moved the apex court seeking directions for the DoT to recalculate AGR dues. In their pleas, they cited “mathematical errors” on the part of DoT, which led to inflated demands. The date of the hearing is yet to be decided.
According to DoT, Vi owes Rs 58,254 crore in AGR dues, while the telco’s estimates are at rs 21,533 crore. Vi has already paid Rs 7,854 crore. DoT has demanded Rs 43,980 crore from Airtel, which is over three times the self-assessed amount of Rs 13,004 crore. Airtel has paid Rs 18,004 crore.
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