In a major relief to Vodafone Idea, the Supreme Court on Monday allowed the Central government to reconsider the issue of additional adjusted gross revenue (AGR) demands raised by the Department of Telecommunications (DoT) for the period up to FY 2016-17.
The apex court took note of the Centre’s submission that it is willing to examine and review the concerns raised by the telecom company. The government informed the Supreme Court that it holds a 49 per cent stake in Vodafone Idea and that nearly 20 crore customers are dependent on the company’s services.
Considering this and the policy nature of the issue, the Supreme Court permitted the Centre to re-examine the matter, saying that it falls within the policy domain of the government.
Vodafone Idea had approached the court claiming that errors in the computation of AGR dues had led to duplication of entries, with certain amounts being added more than once. The company argued that this resulted in an inflated demand from the DoT.
The dispute over AGR has been one of the biggest financial challenges for India’s telecom sector. AGR, or adjusted gross revenue, refers to the usage and licensing fee that telecom operators are required to pay to the Department of Telecommunications. It is calculated based on the operators’ gross revenue, which includes both telecom and non-telecom income.
The issue arose because telecom companies argued that only revenue earned from core telecom operations should be included, while the DoT maintained that all revenues, including non-core sources such as rent, dividends, or interest, should be counted.
In October 2019, the Supreme Court ruled in favour of the DoT, directing telecom operators to pay their AGR dues. Later, in September 2020, the Court allowed telecom companies a period of 10 years to clear their pending dues, with 10 per cent of the amount to be paid every year. The first instalment deadline was set for March 31, 2021.
However, in July 2021, the Supreme Court had dismissed pleas by telecom majors, including Bharti Airtel and Vodafone Idea, seeking correction of errors in the calculation of AGR dues.
Monday’s order marks a significant shift, as the government now has the court’s approval to revisit the issue, potentially easing the financial burden on Vodafone Idea and offering hope for greater stability in the telecom sector.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
