The Centre on Monday (March 16) backed the loss-making telecom companies in Supreme Court, and sought approval of its formula of having a 20-year window for the telcos to pay their adjusted gross revenue (AGR) dues in annual installments. The telcos have been pushing for more time for payment after the top court ordered immediate payment.
A bench of Justices Arun Mishra and MR Shah directed that the Centre’s application be listed before the same bench which had given the October 24, 2019 verdict for payment of AGR dues, amounting to ₹1.47 lakh crore, owed by telecom companies.
The Centre in its application said that looking at the most possible and perhaps inevitable scenario in mind and in larger interest of economic consequences on the nation, the central government has taken a decision to seek approval of this court to a formula arrived at for recovery of the past dues from the telecom service providers.
“This formula, which is placed for approval/ permission of this court, is arrived at after a detailed and long drawn deliberations at various levels of the government in the administrative hierarchy including the cabinet and keeping the vital issues related to the financial health and viability of the telecom sector and need for maintaining competition and level playing field in the interest of consumers,” it said.
Under the formula suggested by the government, the telecom companies impacted by the verdict of the apex court of October 24, 2019, be allowed to pay the DoT-assessed dues in annual installments in over 20 years (or less if they so opt), “duly protecting the next present value of the said dues using a discount rate of eight per cent (based on one year marginal cosy of lending rate of SBI which is currently 7.75 per cent”.
As per the formula, “The interest on the unpaid amount, penalty, and interest on penalty in relation to the past dues as on the date of the judgement of the Supreme Court will not be levied beyond the date of the said judgement, and the net present value will be protected using the discount rate.”
It states that the telecom firms would continue to be liable for interest, penalty, and interest on penalty for unpaid dues of licence fee and spectrum usage charge which arises prospectively after the October 24, 2019, date of judgement of the apex court.
If there is any change in amount of past dues arising from the judgement determined after reconciliation between telecom companies’ self-assessment and DoT’s calculation, then it may be adjusted against the payable installment amounts of the company.
Meanwhile, the government also pointed out that telcos have already paid a part of their dues. Reports suggest the debt-ridden telecom companies have partially paid the ₹1.47 lakh crore that they owed to the telecom ministry following a Supreme Court order.
This includes the ₹3,354 crore that loss-making telecom operator Vodafone Idea paid towards AGR dues to the Department of Telecom.
The company had earlier paid ₹2,500 crore on February 17, 2020, and ₹1,000 crore on February 20 towards AGR liabilities. With this fresh payment, Vodafone Idea (VIL) has paid a total of ₹6,854 crore towards AGR dues.
The DoT has raised total demand of around ₹53,000 core for AGR liability of VIL which included interest, penalty and interest on delay in payment of the amount.
VIL said it had filed its self-assessment of the AGR liabilities with the DoT pm on March 6, 2020, in which AGR liability principal amount of ₹6,854 crore was determined for the period from financial year 2006-07 to FY 2018-19.
(With inputs from agencies)