AGR Dues

Supreme Court on Tuesday gave a period of 10 years to Telecom Companies to pay the Adjusted Gross Revenue (AGR) Dues squashing off the demand of 20 years to repay.

Telecom companies would have to make payments on or before 7 every year. The non-payment of dues in any year would lead to accrual of interest and invite contempt of court proceedings against such companies.

So what is AGR issue?

As part of the National Telecom Policy, 1994, licenses were handed out to telecom companies in return for a fixed license fee. In 1999, after concerns were raised by telecom players over the high fee, the government provided them with the option to migrate to a revenue-sharing fee model.

Under the revised government rules, telcos were advised to share a percentage of their annual gross revenue with the government, a sum that would include the annual license fee (LF) and the spectrum usage charges (SUC).

The telecom companies argued that AGR should include income only from telecom operations.The government - Department of Telecommunications (DoT) - disagreed and said it should also include non-telecom incomes such as the sale of assets, interest on deposits, rents, etc.

So what supreme court directed?

On October 24, the supreme court had directed in favor of DoT as the court accepted DoT’s AGR definition and ordered telecom companies to pay Rs. 92,000 crores to government and now Supreme Court has given a period of 10 years for repayment of AGR dues.

 

CA Shubham Chhajed