Oil India, DMRC move SC; say DoT’s AGR demand will force stop operations

Indian Express
Ashish Aryan
January 23, 2020

State-run Oil India has said that Department of Telecommunications’ (DoT) demand seeking Rs 40,108 crore as adjusted gross revenue (AGR) and other telecom dues “would lead to permanent shutting down” of the company.

Apart from Oil India, state-run Delhi Metro Rail Corporation (DMRC) also moved the Supreme Court with a similar but separate plea, and said that the DoT demand of Rs 5,481 crore would lead to “evaporation of the financial structure” of the company, which would in turn “lead to the DMRC operation coming to stand still to the great detriment of the commuting public”.

In its petition seeking modification of the SC’s October 24, 2019 judgment on AGR, Oil India has said that the DoT’s “huge arbitrary demand was based on wrongful interpretation and erroneous calculation”.

”The demand of DoT significantly erodes the net worth and market valuation of the applicant (Oil India) and would have an adverse impact on the investor perception of the company. That in the applicant’s (Oil India) case, the demand by the DoT amounts to Rs 40,108 crore, and as on 31.03.2019, the net worth of the appellant (Oil India) was Rs 28,000 crore,” the company said in its plea to the apex court.

In the last financial year (FY), the total revenue of the company stood at Rs 13,734 crore, while its net profit was Rs 2,590 crore. The total AGR demand raised against the company by DoT is nearly three times at Rs 48,000 crore.

On October 24, the court had agreed with the DoT’s definition of AGR, and said the companies, both telecom and non-telecom, must pay all dues to the government along with interest and penalty. While telcos were directly hit, the non-telecom companies were also impacted by the SC judgment on AGR.

Both Oil India and DMRC have sought modification of the October 24 judgment to the extent that non-telecom public sector units with national long distance calling licenses were exempted from paying the AGR dues. In an earlier petition, state-run RailTel too had sought a similar modification of the AGR payment orders.

Following the SC judgment, the DoT had issued demand notices to various public sector units (PSUs), including Oil India, DMRC, RailTel, Gail India, among others. Most the non-telecom PSUs have denied that they owe any monies to the DoT, and said they have already paid the amounts due to the government. The DoT, however, is of the view that the clarification on whether PSUs such as GAIL owe any money or not must come only from the SC.

DoT officials have, however, said that they could not give any relief to these companies and that they must seek the relief only from the SC.

”Notices were sent and they have sent their replies, which we are examining. It will be premature for us to say anything right now. We believe that they will have to go to the Supreme Court and seek clarification on whether they are included or not (within the definition of AGR),” a senior DoT official had told The Indian Express last month.


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