Private telecommunications companies
The installments must be paid before February 7 of each successive year and any default will accrue interest. Non-payment will also invite contempt of court proceedings.
- News18.com
- Last update: September 1, 2020 12:13 PM IST
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On Tuesday, the Supreme Court gave telecommunications companies 10 years to settle quotas related to adjusted gross income, which amount to approximately Rs 1.6 million lakhs. The court said that 10 percent of the outstanding amount will be paid before March 31, 2021, which grants the extended deadline in view of the Covid-19 pandemic.
A three-judge bench led by Judge Arun Mishra said fees must be paid before February 7 of each successive year and any default will earn interest. Failure to pay will also invite contempt of court proceedings, the court said, once again clarifying that no revaluation of AGR fees would be contemplated.
News of the verdict plunged Vodafone Idea shares by almost 15%, while Bharti Airtel shares rose almost 6% after the order.
In reaction to the verdict, leading defender Kapil Sibal, who had represented Bharti Airtel, told CNBC-TV18: “The government was willing to give 20 years, but SC said 10. Each company will decide whether to file a petition for review. “.
The department of telecommunications (DoT) had appealed in March to the superior court requesting 20 years for the payment of AGR fees, including the charge for spectrum use, license fee, interest, penalties, and interest on fines. . However, the SC had reservations about granting 20 years to telecommunications companies, expressing doubts about the recovery of quotas, especially from Vodafone Idea, which is reeling from liquidity problems.
In October 2019, the high court issued the verdict on the AGR issue to calculate government fees for telcos, such as Vodafone Idea, Bharti Airtel, and Tata Teleservices, such as license fee and spectrum usage charges.
During the hearings, the telecommunications companies had proposed different deadlines for the settlement of quotas. Vodafone Idea and its rival Bharti Airtel had requested 15 years for the payment of fees, while Tata Teleservices Ltd requested a window of 7 to 10 years. The DoT, however, had stuck to the Union Cabinet’s payment proposal for 20 years.
Reliance Jio Infocomm Ltd, which launched in September 2016, paid its relatively miniscule installments of Rs 195.18 crore in January.
The court, which was also made up of Justices BR Gavai and Krishna Murari, had reserved the verdict on July 20 on the aspect of giving telecommunications companies a deadline for the phased payment of AGR-related fees by saying no you will hear “not for a second” the argument about the reappraisal or recalculation of the AGR.
Before this, he had asked telecommunications companies to archive their books of accounts for the last 10 years and give a reasonable time to pay AGR’s fees, and then got angry when some high-level lawyers began to dispute the fees he calculated. the Department of Transportation.
He said that the period of 15 to 20 years requested by some of the telecommunications companies was not reasonable and asked the Center how it would guarantee the payment of the fees. Later, on August 24, the DoT informed the high court that all liabilities, including AGR-related fees, should be settled by telcos prior to spectrum trading under the guidelines.
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