Apex Court Order on Telecom Revenue will impact Airtel,Vodafone,Idea
By : – Syed Ali Taher Abedi
In a big blow to the telecom Operators in the country, the Apex court today agreed to the department of Teleco’s (DoT) interpretation of “Adjusted Gross Revenue”Apex Court allowed the batch of appeals filed by Dot against TDSAT order and dismissed the appeals filed by the Telecom Operators.
The Apex Court said we have rejected all other submissions of the telecom companies, it added that the service providers would have to pay penalties and interests to Dot.
According the Centre Government’s Submission in July a majority of the private telecom firms like Bharti Airtel,Vodafone and State-owned MTNL and BSNL have pending license fee outstanding of over 92,000 crores till date.
As per the New Telecom Policy the Telecom licensees are required to share percentage of their Adjusted Gross Revenue (ADR) with the government as annual license fee (LF).
Telecom Operators were aggrieved by the Telecom Diputes Settelment and Appellate Tribunal’s (TDSAT) order which ruled that certain nom-telecom revenues like rent, profit on sale of fixed assets, dividend and treasury income would be counted as AGR on which license fee would have to be paid to the government.
This means that Telecom Companies will have to pay up as much as 92,642 crores to the Government, more than half of which are owed by Airtel and Vodafone.
The Apex court termed the issues raised by the Telco’s with respect to AGR as “frivolous” and held that not only the original charges, but principal interest and penalties on delayed payments would also be payable.
This has been on since 2005 when the cellular Operators Association of India (COAI) challenged the government’s definition for AGR calculations.
The Telecom Regulatory Authority of India(TRAI) has in its recommendation paper agreed on many of the sector’s demands such as the exclusion of income from dividend and capital gains on account of profit on sale of assets and securities.
Presently government is entitled to 8% of telecom operators’ AGR as license fee.
The Telecom sector which is already suffering from various financial stress will have to suffer further.
Read the Judgment here
