PSUs may move Supreme Court over Rs 3 lakh crore telecom dues

NEW DELHI: Non-telecom PSUs including Gail India, Power Grid Corp of India Ltd, (PGCIL), Oil India and RailTel Corp are taking legal opinion on how to jointly approach the Supreme Court for relief, having been served demand notices by the telecom department for over Rs 3 lakh crore of combined license fee dues.

The PSUs are seeking opinion from the law ministry on whether they should file a joint petition or seek clarification on the applicability of the apex court's October 24 order, sources in the government said.

None of the PSUs were party to the case between the Department of Telecommunications (DoT) and telecom companies but are still affected by a wider interpretation of the Supreme Court order of October 24, where it had said all revenue belonging to a telecom licensee should be accounted for calculating adjusted gross revenue (AGR).

This implies that companies with even minor telecom businesses may have to pay dues based on their entire revenue, with retrospective effect. Companies need to pay 8% of their AGR as license fee.

“While most of the licensees of DoT were not direct party to the dispute, the ratio of the judgement will be applicable on all the licensees,” communications minister Ravi Shankar Prasad had told Parliament in December.

All four state-run companies didn’t respond to ET’s mails seeking comment.

The PSUs have held several rounds of discussions with senior law ministry officials ahead of the payment deadline of January 23, a senior government official said. The Supreme Court had in its order given three-month window to telecom and non-telecom companies to pay the dues to DoT. The telecom department had also issued notices to the firms seeking payment of dues.

DoT officials, in a series of meetings with the affected PSUs, have clarified that even government divisions such as ERNET (education& research in computer networking) of MeitY will not get any relief from the government.

"It is a bizarre situation, now one government department is asking another to pay up, else go to the Apex Court for relief, even though DoT is well aware that various government departments are not actually telecom service providers," an official of an affected division said.

The official said power minister R KSingh has written to telecom minister Ravi Shankar Prasad, saying the order has been misinterpreted and should not apply to PGCIL that has been asked to cough up about Rs 1.25 lakh crore by the DoT.

Telecom services contribute about 2% to the company’s revenue, while power transmission accounts for nearly 95%. The company made Rs 742 crore in 2018-19 from its telecom business, which puts the licence fee at Rs 59 crore. The power transmission firm has ISP (Inter-net Service Provider)-A and National Long Distance (NLD) licences, which it claims said is different than those that fall under the ambit of the Supreme Court’s order.

Besides PGCIL, DoT had sought Rs 1.72 lakh crore from India's largest natural gas marketer, GAIL, both of which hold national long distance as well as internet licences.

On Thursday, Gujarat Narmada Valley Fertilizers & Chemicals Ltd said that the DoT has slapped a Rs 15,019 crore demand notice, taking the total amount sought from nontelecom companies to over Rs 3 lakh crore.

Additionally, some 15 telecom companies have dues comprising of license fee, spectrum usage charges (SUC), interest and penalties worth over Rs1.47 lakh crore.

Vodafone Idea and Airtel, facing combined dues of over Rs89,000 crore, have filed for a limited review of the SC order.

According to the DoT website, there are 3,468 telecom licensees across the country, including Power Grid, GAIL, Airports Authority of India, the National Stock Exchange, Ministry of Home Affairs, Cabinet Secretariat, Delhi Metro Rail Corp, NTPC, ONGC and Rail-Tel, among others. Many companies hold multiple types of licences under the same name.

These licences that non-telecom companies have are for services such as internet access, national long-distance calls, international long-distance calls, V-Sat and captive services among others. Until now, they have been paying little by way of licence fees since revenue from telecom services was marginal.