Faced with a humongous debt of Rs. 1.47 lakh crore, Indian telecom giants got a huge relief today as the Supreme Court allowed them to clear pending adjusted gross revenue (AGR) dues in 10 years.
Each installment must be made by February 7, every year, a three-judge bench ruled.
The court said that 10% of the amount must be paid by March 31, 2021.
Context: SC ordered telcos to pay up, they sought time.
The case, dating back to 1999, sparked after Department of Telecommunications (DoT) and telcos disagreed on the definition of AGR.
While DoT asserted that AGR ensconces all revenues (before discounts), the companies contested, saying only revenue accrued from core services should contribute toward AGR.
In October last year, SC upheld DoT’s definition, ordering telecom giants to pay the aforementioned amount in 90 days.
Bharti Airtel owes Rs. 35,000 crore, Voda-Idea Rs. 53,000 crore.
Reportedly, Bharti Airtel owes Rs. 35,000 crore to DoT; Vodafone-Idea was asked to pay Rs. 53,000 crore. Only Reliance Jio, owned by Mukesh Ambani, has cleared its AGR dues.
The initial deadline to pay up lapsed on January 24, following which it was extended till March 17, upon the telcos’ request.
InIn February, when companies showed inhibitions in releasing money, the top court fumed.
The telcos showed laxity, bench slammed them.
A three-judge bench, headed by outgoing Justice Arun Mishra, and also including Justices Abdul Nazeer and MR Shah, had asked the telcos why contempt proceedings must not be initiated against them.
“Is there no law left in this country? I am literally anguished, should not work in this country at all. I am saying this with some responsibility,” Justice Mishra had asked.
When DoT sought time for telcos, SC fumed, yet again.
In March, the bench expressed displeasure once again when DoT made a case for the telcos, seeking 20 years’ time for them to clear the dues.
Saying that the previous order would remain unchanged, the bench said, “You are making a nonsense of everything! How can there be self-assessment or re-assessment of payable dues? Who has permitted this? How is this not sheer contempt?”
After verdict, Airtel’s shares rose; Vodafone also gained.
While the bench had taken a strong stance all along, it handed over a major relief to telcos today. However, it remarked that the judgment regarding staggered payment is final, and if companies fail to adhere to it, they would invite contempt proceedings.
After the verdict, Bharti Airtel’s shares rose by 6.6% and cash-strapped Vodafone also recorded gains.