Vodafone Idea has stated it’ll take 15 years for the firm to pay pending legal AGR (Adjusted Gross Revenue) dues worth Rs 53,000 crore. In a note to the Department of Telecommunications (DoT), Finance Ministry and NITI Aayog, the telco has also solicited Rs 8,000 crore worth GST (Goods and Services Tax) refund in grant fees and spectrum mode charges amid pressure from the government as well as the Supreme Court.Very, the DoT’s most important decision-making body, Digital Communications Commission (DCC), will suitably meet day to determine if the telcos, including Bharti Airtel and Vodafone Idea, should at all be granted any change.
- Industry lobby body COAI (Cellular Operators Association of India) have also written a letter to DoT asking to set-off GST credits lying with the government, reduce the license fee and SUC, implement the floor pricing immediately, and restore the confidence of banking sector in the telecom companies.
- “Internationally, it is a common practice to not charge GST on sovereign payments. There’s nearly Rs 40,000 crore of input GST stuck for telecom sector….Banks are currently unwilling to take any risk concerning telecom sector and are constantly asking telecom operators to reduce their exposures by refusing to issue new bank guarantees or even to renew the bank guarantees. There’s a need to give a clear message to banks that government is there to support the sector,” COAI letter said.
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 outstanding companies have already settled their business. Reliance Communications and Aircel are currently undergoing insolvency proceeding.