Telecom companies’ petitions to recalculate AGR dues have been rebuffed by the SC

The Supreme Court on Friday dismissed telecom operators’ requests for a recalculation of the Department of Telecommunications’ Adjusted Gross Revenue (AGR) dues (DoT). The order dismissing the applications brought by Vodafone Idea, Bharti Airtel, and Tata Teleservices was issued by a bench of Justices L Nageswara Rao and Hrishikesh Roy.

The Supreme Court allowed telecom companies to pay their AGR dues in ten annual payments commencing April 1, 2021, after the Supreme Court granted their request in September of last year. The Supreme Court also barred any re-assessment of the AGR dues in the same order.

Thereafter, the three telecos filed a lawsuit in federal court, saying that the DoT’s dues were calculated incorrectly. Senior Advocates Mukul Rohatgi, Dr. Abhishek Manu Singhvi, and Arvind Datar, representing Vodafone-Idea, Bharti Airtel, and Tata Teleservices, claimed that the earlier judgement did not prohibit the correction of mathematical errors. The issue stems from the Supreme Court’s interpretation of the term “Adjusted Gross Revenue” in spectrum licencing agreements between telecom companies and the Department of Transportation in its October 2019 decision.

The AGR is used to calculate the licence fee. The Supreme Court ruled that AGR covers revenue from a company’s non-telecom operations, such as rent, profit on fixed asset sales, dividends, and treasury income. The telecom providers collectively face an additional liability of Rs 92,000 crores as a result of this.

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