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Government To Reconsider Its Stand On One-Time Spectrum Charge On Telecom Operators – BloombergQuint

India will reconsider its position on levying a one-time spectrum charge on telecom operators, less than a month after granting the struggling sector a four-year relief on pending dues.

The one-time dues, if accepted by the court, will come to around Rs 40,000 crore, according to an affidavit filed by the central government in the court and reviewed by BloombergQuint.

Solicitor General of India Tushar Mehta sought time as the decision-making process will involve scrutiny at various levels in the government. The top court granted the government three weeks.

The one-time charge was imposed in 2012 for the spectrum held above 6.2 megahertz in a single circle between July 2008 to January 2013. The government’s willingness to reconsider comes after it recently granted a four-year moratorium on spectrum and statutory payments, giving a lifeline to Vodafone Idea Ltd.

The telecom industry is saddled with liabilities worth around Rs 92,000 crore alone on adjusted gross revenue after losing the legal battle in the Supreme Court.

In the affidavit filed in the top court, the government cited financial stress faced by telecom companies in the recent past.

Bharti Airtel and Vodafone Idea may get financial relief of Rs 8,414 crore and Rs 4,390 crore, respectively, if the government reconsiders its stand on one-time spectrum charge.

Both the companies have already made provisions for the liability in their books, according to their annual reports.

The affidavit said the September measures, including a freeze on repayments, were taken by the cabinet to encourage competition among telecom service providers and avoid a situation where viability of some of the service providers becomes unsustainable.

The decision to review the stand on one-time spectrum charge was taken after considering the facts, financial position and the implications of the potential result of the case, the affidavit said.

The Department of Telecommunications seeking time to reconsider its decision to proceed with the appeal against the order of the TDSAT seems yet another step to rectify the past anomalies, in this case the levy of the one-time charge both for spectrum between 4.4 MHz and 6.2 MHz, and also above 6.2 MHz, said Sameer Chugh, partner at Cyril Amarchand Mangaldas. “Clearly, the signs of revival and future growth of the telecom sector will be a boost to the overall economy.”

The bench presided by Justice MR Shah observed that the top court will also keep in mind the public interest while deciding on the government’s request. It, however, said the court has not expressed any view on the request made by the government.

The case is likely to come up once the central government takes a call and informs the court.

(Corrects an earlier version that misspelt Chugh’s first name)