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India’s telecom area may suffer the quandary

The Supreme Court declared a show-cause notice against these companies in a hearing on a new petition filed by the telecom companies regarding Adjusted Gross Revenue (AGR).

The Supreme Court has asked why the telecom companies have not paid the dues despite the deadline being 23 January 2020. Along with this, the Supreme Court has said that telecom officers, Airtel and Vodafone have disobeyed the court’s order by not accepting it. The court has given time till March 17 to the companies to clear the dues. The next hearing is scheduled for 17 March.

What is the whole dispute..?

There was controversy over the definition of the adjusted gross revenue of the telecom sector. Companies did not do non-business revenue sharing. DoT had sought revenue share in the rest of the business.

This case was pending in the Supreme Court since 2005. The CAG report was causing huge losses to the government. 

The special audit of DoT upheld the demand. The government had sent a notice to the companies asking for the money but the companies challenged the government’s decision in the court.

These corporations are owed

Bharti Airtel owes more than 26 thousand crores. Vodafone-idea owes more than Rs 19000 crore while Reliance Communication owes over Rs 16000 crore. At the same time, BSNL owes Rs 2 thousand crores while MTNL owes Rs 2500 crore.

Which group has an AGR outstanding?

  • According to the news published in Live Mint, according to available estimates, Airtel owes about Rs 35,586 crore including license fee.
  • Vodafone Idea owes Rs 53,000 crore. Of which Rs 24,729 crore is owed to spectrum and another 28,309 crore is a license fee.
  • Similarly, Tata Teleservices owes about Rs 13,800 crore. BSNL owes AGR of Rs 4,989 crore and MTNL Rs 3,122 crore.

Out of the total of Rs 1.47 lakh crore, about Rs 1.13 lakh crore is expected to be recovered, as the AGR of other companies which are outstanding have already settled their business. Reliance Communications and Aircel are currently undergoing insolvency proceeding.

India’s Telecom guru Bharti Airtel Chairman Sunil Mittal whacked for lower taxes and duties for the telecom sector through his meeting with Telecom Minister Ravi Shankar Prasad on Thursday. Calling the AGR issue an unparalleled necessity for the industry, Mittal ensured that Airtel will give its dues well before the Supreme Court-mandated deadline.

“AGR is an odd predicament for industry, which is being dealt with by government,” Mittal told.

The Bharti Airtel Chairman said that his company is bound to complying with the Supreme Court ordering on Adjusted Gross Revenue (AGR) dues and will make balance amounts “expeditiously”.

Bharti Airtel’s overall AGR dues as evaluated by the department of telecommunications (DoT) stand at Rs 35,586 crore including permit fee and spectrum usage cost. The telecom industry is looking at a total payout of Rs 1.47 lakh crore in AGR dues, which strength go up in coming times.

And other major telecoms titans like having submitted a model of their self-assessment to DoT, are not matching with the amounts of DoT. Tata Tele has paid Rs 2,197 crore. According to Tata Tele, it no higher has any debt. According to DoT, Tata Tele has a liability of Rs 14,382 crore. The government is checking the requirements of Tata Tele.

Vodafone-Idea also claims that its debt is 7,000 crore. Needs time for action with corporations. The SC has sought acquiescence with the order by 17 March.

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