Business

Top Court Slams Telecom Department For Demanding Dues From PSUs

Top Court Slams Telecom Department For Demanding Dues From PSUs

The Supreme Court on Friday slammed the Department of Telecommunications (DoT) for demanding Rs 4 lakh crore from state-run companies in AGR- or adjusted gross revenue-related dues. Officials of the telecom department are misusing an earlier judgement for raising demands from public sector companies, the top court said, and warned of initiating contempt proceedings against the concerned officers. The Supreme Court asked the government how it used its judgement on the AGR matter to devise the formula to raise demand from the public sector companies when the judgement did not deal with the issue.

In March, the government said it had detached public sector undertakings - including GAIL and Oil India from the Supreme Court order that sought Rs 1.47 lakh crore from telecom companies as adjusted gross revenue dues.

The top court also asked the telecom companies to file affidavits on how they will pay their AGR dues and asked them about time frame or which securities can be set aside to recover their dues.

Following the court's order in October last year, which upheld the government's definition of AGR, the DoT had sought a cumulative Rs 2.7 lakh crore from GAIL India and other non-telecom PSUs. The demand was challenged by the state-owned firms.

The dispute centers around the definition of adjusted gross revenue. In October last year, the Supreme Court had allowed the telecom department to recover adjusted gross revenue-related dues worth Rs 92,000 crore from telecom companies, backing the government's definition of AGR. The government had earlier last year told the court that telecom companies including private sector firms Bharti Airtel and Vodafone Idea as well as state-run MTNL and BSNL had pending licence fee outstandings of more than Rs 92,000 crore.

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Telecom service providers operating in the country pay the telecom department 3-5 per cent of their AGR in spectrum usage charges and 8 per cent as licence fees. Companies have long argued that AGR should comprise just revenue accrued from core services, while the government says it should include all revenue.

The DoT had sought Rs 1.83 lakh crore from GAIL India and Rs 48,489 crore from Oil India by including their revenues from oil and gas business in calculating dues for leasing out surplus bandwidth capacity to third parties. It had also sought Rs 21,953.65 crore from Power Grid Corporation and Rs 15,019.97 crore from Gujarat Narmada Valley Fertilizers. Other state-run companies that were also slapped with demands included RailTel and Delhi Metro.