Press "Enter" to skip to content

SC slams Centre and telcos for not complying with its order on AGR payment – Times of India

NEW DELHI: Making it clear that no reassessment of the adjusted gross revenue (AGR) dues fixed by it will be allowed, the Supreme Court on Wednesday slammed the Centre and telecom companies for not complying with its order and said any reassessment will amount to contempt of court.
A bench of Justice Arun Mishra, Justice S A Nazeer and Justice M R Shah questioned the Centre for suggesting a staggered formula for telecom service providers for repayment of AGR dues after fighting tooth and nail with the companies. It deferred by two weeks hearing on the Centre’s plea to allow telcos 20 years to pay dues but said the time period suggested by the government is unreasonable.
“We will be party to fraud if we allow self-assessment of AGR dues by telecom companies,” the bench said, adding that it cannot allow reopening of the entire judgment. At the outset itself, the bench referred to AGR dues fixed by it on October 24 last year and said it will take action against managing directors of telecom companies and government officials if its judgment is tinkered with.
The Centre sought the SC’s approval to grant 20 years to telecom companies to pay in instalments the Rs 1.69 lakh crore dues on account of AGR, saying the economy will be adversely impacted if service providers do not have enough time to pay dues. It said if the companies are not bailed out, it may cause major loss of direct and indirect employment and have a cascading negative impact on the other sectors.
The application said foreign direct investment sentiment would also be adversely affected and there would be adverse impact on the quality of telecom services. Government sources later explained that the recent slowdown and further impact of coronavirus were a factor in its plea before the SC.
“Exercise of self-assessment of AGR dues by telecom companies cannot be permitted even in the wildest dreams,” it said. The court also said telcos were trying to influence the court through the media by publishing articles in their favour on the issue.
In its application, the government informed the court that telcos have so far paid over Rs 25,000 crore and Rs 1.44 lakh crore is due on them.
The apex court had on October 24 allowed the Centre to recover the amount as licence fee and penalty along with interest based on the revenue-sharing model from 2004 till 2015. It had dismissed plea of the companies that AGR, on the basis of which fee is paid by them to the Centre, should include only core telecom services and revenue from other sources be excluded.
It had accepted the Centre’s contention that AGR should include dividends, handset sales, rent and profit from the sale of scrap, apart from revenue from services. Initially, 15% AGR was fixed as licence fee under revenue sharing, which was reduced to 13% and then to 8% in 2013.
Telecom companies, including Bharti Airtel, Vodafone Idea and Tata Teleservices, thereafter sought review of the verdict but their plea was dismissed by the SC on January 16.