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AGR woes: Telecom department slaps Rs 15,019 crore demand notice on a Gujarat's fertiliser firm

The dues pertain to financial years from 2005-06 to 2018-19 in connection with VSAT and ISP licences held by the company

twitter-logoPTI | January 2, 2020 | Updated 17:30 IST
AGR woes: Telecom department slaps Rs 15,019 crore demand notice on a Gujarat's fertiliser firm
The DoT has made it clear that the AGR order will apply to all licencees, including companies such as GAIL, RailTel, and PowerGrid

Gujarat Narmada Valley Fertilizers and Chemicals (GNVFC) has received a demand notice from the telecom department for payment of outstanding dues worth Rs 15,019 crore by January 23, 2020. The dues pertain to financial years from 2005-06 to 2018-19 in connection with VSAT and ISP licences held by the company, it said. The outstanding includes interest amount as well.

The company said it is seeking expert legal advice in the matter to decide future course of action."The company is presently examining the said demand notice and judgement of the Supreme Court by seeking expert legal advice in the matter," GNVFC said in a BSE filing. Based on the legal advice, the company will decide the future course of actions on the issue, it added.

The fertiliser firm informed that it has "received a demand notice from the Office of Controller of Communication Accounts, DoT, Ministry of Communications, Government of India, Gujarat Telecom Circle, Ahmedabad...directing the company to deposit the total outstanding amount of Rs 15019,97,48,444 (inclusive of interest amount) before January 23, 2020, in respect of financial years from 2005-06 to 2018-19 in connection with VSAT & ISP Licenses held by the company". The Department of Telecommunications (DoT) has also sought Rs 1.72 lakh crore in past statutory dues from state-owned gas utility GAIL India following the Supreme Court's AGR (Adjusted Gross Revenue) ruling in October.

The DoT had sent a letter to GAIL seeking Rs 1,72,655 crore in dues on IP-1 and IP-2 licences as well as Internet Service Provider (ISP) licence. In response, GAIL has told the DoT that it owes nothing more than what it has already paid to the government. Besides GAIL, the DoT is also seeking Rs 1.25 lakh crore from PowerGrid which had both a national long-distance as well as an internet licence. PowerGrid says it has an AGR of Rs 3,566 crore since 2006-07 and after adding penalty it comes to Rs 22,168 crore.

After sending out notices to firms such as GAIL, the DoT has said any relief to non-telecom companies from payment of enhanced levies can come only from the Supreme Court. The DoT is currently "examining" the replies given by the state-owned non-telecom firms on the AGR dues, a senior official had recently told PTI. Bharti Airtel, Vodafone Idea and other telecom companies owe the government nearly Rs 1.47 lakh crore in past statutory dues.

These AGR liabilities arose after the apex court in October last year upheld the government's position on including revenue from non-telecommunication businesses for calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fees to the exchequer. The apex court allowed three months to the affected companies to cough up the amounts due to the government.

The DoT has meanwhile made it clear that the AGR order will apply to all licencees, including companies such as GAIL, RailTel, and PowerGrid. As things stand today, such players, despite a smaller telecom exposure, may have to pay liabilities computed on their entire revenue. Non-telcos, such as ISPs, had argued that the DoT has unnecessarily imposed the order on ISPs, many of which are run by entrepreneurs in smaller cities and towns.

Also read: Relief for non-telecom companies on AGR dues can come from SC only: DoT official

Also read: AGR crisis: Airtel files review petition in SC for interest fee, penalty waiver

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