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Supreme Court slams Government for diluting the Telecom AGR dues and dubious self-assessment of dues by the companies

Supreme Court unhappy with the Government's volte-face on collection of dues from Telecom cos.

March 18, 2020

The Supreme Court on Wednesday slammed the Government and Telecom companies for doing self-assessment or reassessment of the Adjusted Gross Revenue (AGR) dues fixed by the apex court in its verdict given on October 24 last year. Expressing displeasure, the apex court cautioned the telecom companies for publishing fake news and publishing wrong narrations in media against the Court’s judgment and said all Managing Directors of telecom companies will be personally responsible for these dubious activities.

The apex court Judges expressed anguish over the Government’s suomoto affidavit to provide 20 years’ time to telecom firms to pay the dues. The bench of Justice Arun Mishra, Justice S A Nazeer and Justice M R Shah refused to take up the Centre’s plea for allowing telecom companies to pay AGR dues in 20 years, saying the application will be taken up after two weeks.

“The time frame of 20 years is unreasonable. The telecom companies have to clear all dues mentioned in the judgment,” the bench said, adding it had settled all AGR dues after hearing telecom companies and the government then had fought tooth and nail for interests and penalties. The bench said it will summon the secretary and desk officer of the Department of Telecommunications (DoT) who permitted telecom companies to do self-assessment of AGR dues.

“Exercise of self-assessment of AGR dues by telecom companies cannot be permitted even in wildest dreams,” it said. The court said serious fraud was being committed by telecom companies by asserting to do self-assessment of AGR dues and that its judgment was final and to be followed in letter and spirit.

“We will be a party to fraud if we allow self-assessment of AGR dues by telecom companies,” the bench said, adding, it cannot permit encroachment of its powers by allowing self-assessment.

The court also said that newspaper articles will not be able to influence its decision and it will draw contempt proceedings against the managing directors of telecom companies if they publish “fake news” against court on payment of AGR dues. “Any future newspaper article hiding truth from the public on telecom case will make MDs of telecoms personally responsible,” the bench said.

The Supreme Court on October 24 last year ruled that the statutory dues need to be calculated by including non-telecom revenues in AGR of telecom companies. It had upheld the AGR definition formulated by the DoT and termed “frivolous” the nature of objections raised by the telecom service providers. The previous month, the Court slammed the Department of Telecom for issuing a notice directing no-cohesive action against the telecom firms. After getting slammed in the Court, the Department had withdrawn the notice and asked companies to pay dues immediately.

Bharti Airtel, Vodafone Idea and Tata Group‘s self-assessment of dues to the Government are a whopping Rs.82,300 crores short of what the telecom department calculated after the Supreme Court’s ruling on AGR. Supreme Court lashed out at the telcos for trying to reopen the dues they owed to the government through the self-assessment exercise. The Department of Telecommunications (DoT), according to its own submission to the apex court seeking relief in payment tenure, has put dues of the three companies at Rs.1.19 lakh crores.

The dues estimated by DoT for Bharti Airtel and Telnor was pegged at Rs.43,980 crores, while that of Vodafone Idea was Rs.58,254 crores, and Tata Group of companies at Rs.16,798 crores outlined under ‘total demand of DoT incorporating CAG and special audit as on October 2019′.

Against this, Bharti Group has calculated its dues at Rs.13,004 crores, Vodafone Idea at Rs.21,533 crores and Tata Group of companies at Rs.2,197 crores. In all, AGR dues calculated by the government for 16 entities add up to Rs.1.69 lakh crores, while telcos’ self-assessment place their dues at a mere Rs.37,176 crores.

Beleaguered Vodafone Idea has pegged its total dues to the Government following a Supreme Court order at Rs.21,533 crores. Earlier this week, Vodafone Idea paid another tranche of Rs.3,354 crores to the government, thereby taking its total payments to Rs.6,854 crores. The company said this was equivalent to full principal amount as per its self-assessment. Bharti Airtel has paid Rs.13,004 crores to the government in two installments. It had also deposited an additional Rs.5,000 crores “as an ad-hoc payment (subject to subsequent refund/adjustment) to cover differences, if any, arising from the reconciliation exercise with the DoT. Tata Teleservices has paid Rs.2,197 crores in AGR dues, and thereafter an additional Rs.2,000 crores to cover reconciliation differences.

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