NEW DELHI: After ruling in favour of the government's argument on the definition of Adjusted Gross Revenue (AGR), used to calculate license fees and other levies, on Thursday, the Supreme Court has allowed telecom service providers just three months to pay up dues worth a staggering Rs 92,641 crore.
"Appeals of licensees are dismissed and filed by DOT are allowed in terms of the signed reportable judgement," said the SC order, adding, "We give three months’ time to deposit the amount, which is due and compliance be reported. Pending applications, if any, are disposed of".
A three-judge bench headed by Justice Arun Mishra had upheld the government’s view on AGR definition on Thursday in a case which has dragged on for more than a decade. While the government had held that all income, including from non-telecom related activities, should be accounted under AGR for calculation of levies like license fees, telecom service providers have opposed the definition.
The Cellular Operators Association of India (COAI) had taken the matter to court in 2005.
For a sector struggling to make profits in a high-competition, low tariff environment since the entry of Reliance Jio in 2016, the judgement comes as a big blow.
The two largest incumbents Bharti Airtel and Vodafone Idea now stand to shell out a whopping Rs 21,682 crore and Rs 28,308 crore respectively to the government, while others like bankrupt Reliance Communications (Rs 16,456 crore), BSNL (Rs 2,098.72 crore) and MTNL (Rs 2,537.48 crore) stand to payout substantial amounts too. New entrant Reliance Jio, however, only stands to payout a measly Rs 13 crore.
According to the DoT affidavit, telecom players owe the government Rs 23,189 crore in AGR dues and another Rs 41,650 crore in interest, alongside a penalty of Rs 10,923 crore and Rs 16,878 crore interest levied on the penalty due.
Both Bharti Airtel and Vodafone Idea have expressed disappointment with the verdict, and have requested the Centre to review the claim.
"The judgement is the last straw in contributing to financial distress and it remains to be seen whether the industry will be able to recover from this setback,” Rajan Mathews, director general, COAI had said on Thursday.