Govt dues: Big relief for PSUs, telcos told to give timeframe


The Indian Express
Dated: June 12, 2020
By: Aashish Aryan, Ananthakrishnan G

The Supreme Court Thursday said the demand by the Department of Telecommunications for dues to the tune of Rs 3 lakh crore in adjusted gross revenue (AGR) from non-telecom public sector undertakings was “wholly impermissible” and asked the DoT to withdraw it.
Thursday’s order, which will provide a major relief to GAIL India Ltd, Oil India Ltd, PowerGrid, RailTel and Delhi Metro Rail Corporation, comes almost eight months after the October 24, 2019, Supreme Court judgment.

“Outright misuse of our verdict…This is wholly and totally impermissible,” Justice Arun Mishra observed as a bench comprising him, Justices S Abdul Nazeer and M R Shah, was hearing a government plea to allow private operators pay their AGR dues in a staggered manner over 20 years.

The order is significant since the Rs 3 lakh crore demand from non-telecom PSUs accounts for almost 65 per cent of the total Rs 4.7 lakh crore demand from all companies, including private and state-owned telcos.

If the amount is not realised, it could impact the government’s fiscal math, since the Centre would receive just a fraction of the total estimated revenue for the current financial year.
In 2020-21, the Finance Ministry had estimated realisation of Rs 1.33 lakh crore under the head ‘other communication services’, 125 per cent more than Rs 58,989.64 crore in the Revised Estimate for 2019-20.
While it had not specified if the estimated Rs 1.33 lakh crore would come from telcos or non-telcos, the ‘other communication services’ head contains mainly relates to license fees from telecom operators and receipts on account of spectrum usage charges. The spectrum usage charges are calculated as a percentage of AGR depending on the quantum of spectrum assigned for their network.

The DoT demand, the Supreme Court said Thursday, could not have been raised as its October 24 judgment was silent on the issue. It has now asked the DoT to withdraw the demand notices, and clarify its stand on the payment being sought by the PSUs. Solicitor General Tushar Mehta submitted that these PSUs did not provide mobile services like other telecom providers for commercial exploitation and hence needed to be treated differently than private sector telecom providers.

 “We would request you to withdraw this (demand on PSUs) otherwise we will take strict action against them,” the bench said and asked the Solicitor General to file an affidavit on how the bill was raised. The PSUs had always maintained they owed nothing to the DoT as all the license fees had been paid on time. But the DoT did not budge from the demands raised.

On October 24, the Supreme Court had upheld the DoT definition of AGR and said since the licencees had agreed to the migration packages, they were liable to pay the dues, and the interest on penalty due to delay in payments. It gave them three months to clear their AGR dues. Since then, the telcos tried to persuade both the DoT and the court to extend them some relief in the form of either staggered payments or a waiver of interest and penalty on interest.

On Thursday, the Supreme Court also asked private telcos to submit a time frame for repayment of the pending dues of Rs 1.47 lakh crores. The two major private telecom companies, Bharti Airtel and Vodafone Idea face a combined AGR pay out of Rs 1.07 lakh crore. According to the latest affidavit filed by the DoT in March 2020, Bharti Airtel owed the government Rs 25, 976 crore as AGR, while Vodafone Idea owed Rs 54,754 crore.

Bharti Airtel has paid Rs 18,000 crore and claimed it had paid 100 per cent of the dues based on its own calculations, experts said the company would look to further distribute the load over a period rather than looking for any bulk payments. Vodafone Idea has paid Rs 6,854 crore and claimed it had paid the principal AGR amount. The debt-laden telco had then said that it owed the government a total of Rs 21,533 crore as AGR, according to its internal calculations.

On Thursday, Vodafone Idea told the top court it was in no condition to pay the full sum in one go or even provide a bank guarantee of the same amount, as it was finding it difficult to pay even the salaries of its staff on time.

Solicitor General Mehta said seeking the entire amount in one go may adversely impact the telecom sector. It would affect the network with consumers suffering ultimately, he said. The court said repayment over 20 years did not seem reasonable and sought a time frame from the private telcos.

Reference: https://indianexpress.com/article/india/govt-dues-big-relief-for-psus-telcos-told-to-give-timeframe-6454858/

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