Business

After SC Ire, DoT Sets up a Rs 1.4 Lakh Crore Stand-off at Stroke of Midnight

While Airtel has offered part-payment of Rs 10,000 crore by February 20, it's unclear what Vodafone-Idea will do, which has warned shutting shop in the past.

New Delhi: India’s department of telecommunications has asked all telecom operators to repay their adjusted gross revenue (AGR) dues by 11:59 PM today, in a move that comes after the Supreme Court slammed the government for allowing the industry to delay complying with its verdict in the same matter.

“You are hereby directed to make the payment of outstanding dues of licence fee and spectrum usage charges by 11:59 pm of 14 February positively,” a DoT letter dated February 14 said.

The telecom department has also withdrawn its now-controversial order of January 23, in which it decided not to take coercive action against the telecom operators that failed to meet the Supreme Court-mandated deadline to pay their dues.

The apex court had in October 2019 settled a decades-long dispute over AGR dues in favour of the Centre, in the process upholding the way the government calculated fees using a formula disputed by the companies.

The bottomline of the Supreme Court’s judgement meant that 15 entities in the telecom and various adjacent sectors owed the government a whopping Rs 1.47 lakh crore – Rs 92,642 crore in unpaid licence fees and another Rs 55,054 crore in outstanding spectrum usage charges.

Also read: Supreme Court Slams Telecom Companies, DoT Over Non-Compliance of AGR Verdict

Incumbent operators Bharti Airtel and Vodafone-Idea have to pay a massive chunk of this Rs 1.47 lakh crore. This has significant economic consequences especially for Vodafone-Idea, which has warned that if it is forced to immediately repay its entire owed amount, it will have no choice but to shut shop.

In the last five months, both the government and the telecom industry have dragged their feet over implementing the court verdict, with the latter filing review petitions which were promptly rejected.

All of this was viewed poorly by a bench of Supreme Court judges including Justice Arun Mishra, which on Friday afternoon made searing observations against both the Centre and the country’s telecom operators.

“We draw contempt against companies. Let the [DoT] desk officer also explain why appropriate action should not be taken and he should be present on the next date of hearing. Please ask the desk officer to withdraw that DoT order or he will go behind the bars by evening. We have to take action against him. Officer should understand where they should stop. It is clear contempt,” the court said.

Ordering that the the AGR dues should be repaid immediately, the apex court also asked top executives of the telecom operators to appear on March 17 for the hearing.

It is unclear whether the DoT has now required that the whole amount of dues has to be paid by midnight today (Friday), or whether a part payment will be sufficient.

Vodafone-Idea has not publicly commented, while media reports say that Bharti Airtel plans on depositing Rs 10,000 crore as part payment by February 20 and will clear its full balance before the next court hearing on March 17.

“We are confident that we will complete the self assessment exercise shortly and make the balance payment well before the next date of hearing of the Supreme Court,” Airtel’s letter to the DoT said.

The company’s total dues are Rs 35,586 crore, while Vodafone-Idea’s dues are worth more than Rs 50,000 crore.

(With inputs from PTI)