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Relief to non-telcos can come only from Supreme Court: Report

After sending out notices to firms such as gas utility GAIL for crores of rupees in past dues, the Department of Telecommunications has said any relief to non-telecom companies from payment of enhanced levies can come only from the Supreme Court.

Relief to non-telcos can come only from Supreme Court: Report
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New Delhi

The Telecom Department is currently “examining” the replies given by the state-owned non-telecom corporations on the Adjusted Gross Revenue (AGR) dues, a senior official said.

“They have sent their replies, which we are examining. We believe that they will have to go to Supreme Court to seek notification or clarification on whether they are included or not included in this (Supreme Court order). That is for them to seek,” the Telecom Department official said.

There are certain cases where players were parties in the court and in those cases the companies are bound by the court order. Some parties have also filed review petition, the official noted. “Then there were others who were not parties, they will have to take a call because our assessment is that it will be applicable...we are examining the issue but in our assessment they will probably have to go to SC to seek a clarification,” the official added.

As it is, Bharti Airtel, Vodafone Idea and other telecom companies owe the government nearly Rs 1.47 trillion (Rs 1.47 lakh cr) in past statutory dues. These AGR liabilities arose after the Supreme Court in October this year upheld the government’s position on including revenue from non-telecommunication businesses for calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fees to the exchequer. The apex court allowed three months to the affected companies to cough up the amounts due to the government.

The Department of Telecommunications (DoT) has meanwhile made it clear that the AGR order will apply to all licencees, including companies such as GAIL, RailTel, and Power Grid.

As things stand today, such players, despite a smaller telecom exposure, may have to pay liabilities computed on their entire revenue.

Non-telcos, such as internet service providers (ISPs), had argued that DoT has unnecessarily imposed the order on internet service providers, many of which are run by entrepreneurs in smaller cities and towns. It had also sought intervention of the PMO to resolve this issue.

The DoT has sought Rs 1.72 lakh cr in past statutory dues from state-owned gas utility GAIL India Ltd following the Supreme Court’s AGR ruling. DoT sent a letter to GAIL last month seeking Rs 1,72,655 crore in dues on IP-1 and IP-2 licences as well as Internet Service Provider (ISP) licence. In response, GAIL has told DoT it owes nothing more than what it has already paid to the government. DoT is also seeking Rs 1.25 lakh cr from PowerGrid which had both a national long-distance as well as an internet licence.

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