In a major judgement that will affect telecom companies like Airtel, Vodafone Idea and others, the Supreme Court on Thursday upheld the Central government's plea on its interpretation of Adjusted Gross Revenue (AGR). A bench of justices Arun Mishra, S Abdul Nazeer, and MR Shah held that most revenue components, "except one or two", would fall within the Department of Telecommunications' (DoT) definition of AGR, thereby ending over 14 years of legal battle between the Centre and the telecom companies.
After the rejection of appeal against the definition of AGR, telecom companies would now have to pay over Rs 92,000 crore to the DoT. The SC said it would later fix a time schedule as to when the telecom companies have to pay the amount.
In a filing in the apex court in August, the DoT had asked telcos to pay up Rs 92,641 crore on account of license fees and spectrum usage charges (SUC), which are decided on the basis of AGR.
DoT had argued that a wider number of items - interest income, dividend, profits on the sale of assets, insurance claims and forex gains - should be included as components of AGR. Telcos, for obvious reasons, had not agreed to the definition.
The fuss over defining AGR has been dragged so long that the actual dispute amount now remains a small proportion (25 per cent) of the total dues that the DoT is asking for. The Rs 92,641 crore includes Rs 23,189 crore as the disputed amount, Rs 41,650 crore of the levy of interest, Rs 10,923 crore as penalty, and Rs 16,878 crore as interest on penalty. Just about three years ago, the total dues were just Rs 29,474 crore.
AGR is calculated on the basis of spectrum usage charges and licence fees payable by telecom companies. The telecom companies are liable to pay around 3-5 per cent of AGR as spectrum usage charges and 8 per cent of the AGR and licence fees.
Edited by Manoj Sharma