Bharti Airtel requests tax leniency; govt set to play balancing act on AGR dues

Following complaints of disparity in AGR figures, telecom department plans to initiate random test checks to detect any mistakes

The DoT had approached the apex court in March seeking permission to allow the telcos to pay outstanding AGR dues to the tune of 1.43 lakh crore in annual installments over a 20-year period. Photo: iStock

Following the Supreme Court’s rebuke of telecom companies for not meeting the deadline of paying ₹1.47 lakh crore AGR (Adjusted Gross Revenue) to the government, the latter sensing a deepening crisis is looking to strike a balance between complying to the apex court’s order and safeguarding consumer interest.

Responding to claims of disparity in dues calculated by telecoms and that by the government, the telecom department has said it will initiate ‘random test checks’ before March 17 to find any mistakes in calculations.

Relax taxes for sake of industry’s health, urges Mittal

Meanwhile, Sunil Bharti Mittal, founder and chairman of Bharti Airtel, one of the defaulting telecoms, has urged the government to relax taxes and levies in the telecommunication sector to enable them to pay back the AGR.  Mittal met Union Finance Minister Nirmala Sitharaman on Wednesday and again Telecom Minister Ravi Shankar Prasad a day later, to push his request.

Terming the situation as an ‘unprecedented crisis’ for the telcom industry, Mittal said levies need to be looked at as the industry has a low revenue left in store. He said the government is fully focused towards the digital sector, and all discussions so far indicate that it is is ‘alive to the situation.’

While Bharti Airtel has promised to clear all its dues, before the March 17 deadline, Vodafone Idea Ltd, the most vulnerable of the lot, paid another ₹1,000 crore on Thursday.

Quoting a top government official, a PTI report said attempts are being made by the Centre to balance the need for health of the sector and consumer interest while complying with the Supreme Court order on statutory dues.

Related news: Telecom crisis: 75% of telcos’ total dues is interest and penalties 

Although the official did not elaborate, sector watchers said the statement alludes to the government keen on ensuring adequate competition by retaining the present three-plus-one model of competition (three private players and one public sector company).

Vodafone Idea, which as per the Department of Telecommunications (DoT) owes over ₹53,000 crore in dues, paid ₹1,000 crore more to take its total payout this week to ₹3,500 crore. This together with ₹10,000 crore that Bharti Airtel had paid and another ₹2,197 crore paid by Tata Teleservices has taken the payments collected so far to almost ₹16,000 crore.

Some companies have assured they will make additional payments over the next week.

Earlier in the day, Telecom Regulatory Authority of India (TRAI) Chairman RS Sharma also met the Telecom Minister but did not comment on the details of the meeting.

Govt to do its math

Reports say the government will meanwhile, verify the companies’ claims on AGR-math and examine any deviations from its own calculation, through random ‘test checks’ before the March 17 deadline.

The ‘test check’ will happen for all telecom firms, but will start with those which have already claimed they have made full and final settlement towards their statutory liabilities. The exercise will help the department assess the gap between telcos’ claim of what their adjusted gross revenue (AGR) dues are and its own estimates, sources added.

On February 14, the Supreme Court lashed out at defaulting telecom companies for not abiding by the court-fixed deadline of January 23 to pay past dues and at the government for failing to extract it. Reports say, since then companies and the government are re-tabulating the actual dues.

Related news: If Indian telcos sink, they may drag economy and banks along

The DoT had previously estimated ₹1.47 lakh crore as dues, including penalty and interest, from Bharti Airtel, Vodafone Idea and other firms. But telecom firms say the amount should be lower.

(With inputs from agencies)

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