Government may not seek additional AGR payments this fiscal

Officials in the Department of Telecommunications said the SC will clarify the timeline for payment of the first instalment and whether it should be equivalent to 10% of the total dues or the outstanding amount.

Mumbai: The government is unlikely to proactively seek additional amounts from Vodafone Idea (Vi) and Bharti Airtel towards adjusted gross revenue (AGR) dues this financial year and will approach the Supreme Court in April to decide on the dispute over upfront payments.

Officials in the Department of Telecommunications said the SC will clarify the timeline for payment of the first instalment and whether it should be equivalent to 10% of the total dues or the outstanding amount.

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“They (Airtel and Vi) have written to us that they have paid their 10% dues, but we differ. The matter will now be decided by the Supreme Court,” one official said. “We are mandated by the order to inform the court by April 7 on defaults and payments made by telcos… we will do that and see what the court says.”

DoT has also sought Solicitor General Tushar Mehta’s opinion on the matter.

DoT hasn’t responded to letters from Airtel and Vi seeking clarity on the method used to calculate the AGR dues and stating that they have paid their dues, the official said, adding that there was no need to respond in the interim, since, according to them, the order was very clear.

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The Supreme Court ruled on September 1 that telecom operators must pay 10% of their AGR dues as demanded by DoT by March 31, 2021, and the remainder in equal instalments every financial year up to March 31, 2031.

Vi and Airtel said they have paid more than 10% of their AGR dues and that their first instalment falls due only in the year ending March 2022.

However, DoT’s interpretation is that the court was aware of the payments already made by the operators and when it asked them to pay 10% of the AGR dues, it clearly meant they needed to pay that in addition to the amounts already paid. The rest would need to be spread equally over 10 years.

Airtel and Vi are convinced they have followed the court’s order and need to pay ₹25,976 crore and about ₹50,400 crore more, respectively, over 10 annual instalments.

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The next round of the battle over AGR dues comes as internet service providers are expected to head to the apex court and ask for clarity on whether they have to pay the dues or can be excused like the public-sector units, an industry executive said, asking not to be identified.

The telecom tribunal dismissed a plea by internet service provider Netmagic Solutions to prevent DoT from seeking AGR dues, saying it will not interfere with the SC’s order. The tribunal order has implications for some 35 major ISPs, which face AGR due demands of about ₹18,000 crore.
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