NEW DELHI: In a move likely to offer some hope of relief for affected telecom service providers, especially Vodafone Idea Ltd (VIL), the union government on Monday moved the Supreme Court (SC) seeking permission to roll out an extended payment schedule for pending AGR dues.
According to the proposal designed by the Department of Telecom (DoT), the telcos will be allowed to pay their dues over a 20-year period instead of in one go.
The SC had in October last year ruled that adjusted gross revenue (AGR) should include non-telecom revenues of license holders and directed affected telcos to pay Rs1.47 lakh crore in pending dues by January 23. However, while Bharti Airtel and Tata Group claim to have deposited the full amount, albeit estimated at less than half of the DoT’s claims, VIL has so far paid only the self-assessed principal due of Rs 6,854 crore.
It has warned that it may have to head toward insolvency if forced to pay the rest immediately. On Monday, the government submitted before a bench consisting of Justices Arun Mishra and M R Shah that if telcos were to pay the dues immediately there would be a “cascading negative impact on other sectors of the economy”, a rise in adverse foreign investment sentiment, and noted that the closure of a telco could lead to a major loss of jobs.
“Keeping the aforesaid most possible and perhaps inevitable scenario in mind and in the larger economic consequences on the nation … the central government has taken a decision to seek approval of (the SC) to a formula arrived at for recovery of past dues,” the government said.
The formula, which sources say was approved by the Cabinet last week, will allow telcos to pay their dues over the course of 20 years in several instalments at an interest rate of 8 per cent a year. Interest on the unpaid amount, penalty and interest on penalty for past dues will not be levied beyond the date of the SC judgement on AGR.
“However, TSPs shall continue to be liable” for these on unpaid dues which arise prospectively after the date of the judgement (October 24, 2019). The SC accepted the plea and directed that the same bench would hear the petition.
VIL pays another G3,354 crore toward AGR dues
Vodafone Idea made an additional payment of Rs 3,354 crore towards its AGR liabilities on Monday, claiming that it has now completed the payment of its entire principal amount that it due on a self-assessed basis. With this, VIL has paid Rs 6,854 crore towards AGR dues so far.
While the company estimates its entire dues at around Rs 21,000 crore, the DoT claims this figure stands at over Rs 53,000 crore.