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Bharti Airtel, Vodafone Idea seek Supreme Court’s review for waiving AGR penalties

Bharti Airtel and Vodafone Idea filed a petition on Friday to the highest judicial court of India, Supreme Court to seek review for the waiver of interest and penalties in the Adjusted Gross Revenue (AGR) amount. The judgment is a 14-year-old case filed on the 24th of October, which ordered the telecom companies to pay dues and interests of ₹92000 crores to the Department of Telecommunications (DoT).

“It’s not a complete review of the judgment—Bharti has asked for a review of the penalty, interest and the amount of interest on penalty,” an official said, requesting anonymity. As per the DoT’s claim that the telecom companies had underreported their revenues, paying fewer levies to the government.

A three-judge bench, headed by Justice Arun Mishra, will decide if the review plea will be allowed. The bench also comprised S.A. Nazeer and M.R. Shah.

Airtel Bharti has to pay Rs 35,586 crore to the government, of which Rs 21,682 crore is license fee and another Rs 13,904 crore is the spectrum usage charges while Vodafone Idea, the country’s largest telecom operator in terms of subscribers, has an outstanding due of Rs 53,038 crore, which includes Rs 28,309 crore in license fee and Rs 24,730 crore in spectrum usage charges.

Levies in the telecom sector are based on a percentage of the adjusted gross revenues (AGR) of companies. The DoT contended that the telcos’ AGR should also include income from dividends and revenue from the sale of handsets bundled with services, a view the companies disputed.

The apex court has asked the companies to make the payments within three months of the judgment. The DoT, in a 13 November letter, directed operators to conduct a self-assessment of dues in the wake of the SC verdict.

The government made it clear that it is not considering any proposal on waiver of penalties and interest on outstanding license fees based on adjusted gross revenue (AGR), or on extending the timelines for telecom companies to pay up their statutory dues.

“No such proposal is under consideration of the government as on date,” Prasad said while responding to specific questions on whether the government proposes to provide a waiver for penalties and interest on the non-payment of license fee on AGRs by telecom operators and also on whether it is consider ing extending the time limit for the payment of license fee, penalty, interest, and other dues.

In a relief to telecom companies, the Union Cabinet on 20 November approved a moratorium of two years for spectrum payments. Also, starting next month, all the operators, including Vodafone, Airtel, Jio and Bharat Sanchar Nigam Ltd, will raise the prices of their services.

The two other companies which have filed a review petition are Tata Teleservices and Hughes Communications India. Tata Teleservices is currently undergoing a merger with Bharti Airtel, a process DoT opposes.

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